DraftKings Inc. (DKNG): A Bull Case Theory
We came across a bullish thesis on DraftKings Inc. on Cundill Deep ValueCundill Deep Value’s Substack by FRAGMENTS. In this article, we will summarize the bulls’ thesis on DKNG. DraftKings Inc.'s share was trading at $27.22 as of February 9th. DKNG’s forward P/E was 17.51 respectively according to Yahoo Finance.
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DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. DKNG can be best understood not as a traditional sports betting company, but as a digitized casino distribution platform that has migrated a long-standing, durable human behavior onto the smartphone. For decades, casinos generated resilient cash flows not because of physical locations, but because demand for fast-feedback, chance-based activity is structurally persistent. Sports betting did not create new demand; it removed friction.
DraftKings sits at the center of this shift, using sports as the most scalable attention channel in the U.S. to acquire and retain customers within a tightly engineered behavioral loop that prioritizes engagement, repeat activity, and habit formation. Events like the Super Bowl function less as demand drivers and more as peak distribution moments, where operators effectively purchase large user cohorts through promotions, marketing, and short-term margin trade-offs. The company’s own disclosures reinforce this framing, emphasizing engagement, efficient acquisition, and structural hold while acknowledging that short-term outcomes can introduce material revenue volatility.
Crucially, DraftKings’ long-term durability is supported by its mobile casino offerings, which provide higher-frequency, more predictable revenue streams that stabilize the inherently seasonal and outcome-sensitive sportsbook business. As sports betting normalizes across the U.S., DraftKings benefits from legalized distribution, cultural adoption, and product design optimized for retention, positioning it as a scalable behavioral business rather than a cyclical sports play.
While increased scrutiny is inevitable as externalities surface, the underlying model mirrors casino economics that have endured for decades. In this context, DraftKings represents a structurally durable platform whose value lies in distribution efficiency and behavioral persistence, not single-event outcomes, offering a compelling long-term investment narrative as the casino continues its transition into the phone.
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