Analysts Stay Bullish on Gaming Heavyweights Despite Emerging Challenges

Wall Street analysts remain largely confident in their positive assessments regarding traditional, high-profile gaming operators. Evaluations published this month predict that, despite increased turbulence in 2026, industry giants such as DraftKings and Flutter will remain well-positioned to absorb shocks and deliver long-term growth as long as they maintain their focus on innovation.

Leading Operators Can Adapt to Short-Term Challenges

Truist Securities recently released its forecast on the US gaming sector, retaining Buy ratings on DraftKings and Flutter. The firm recognized that prediction markets and higher state taxes present immediate challenges. However, it was confident that traditional high-profile operators could ride out the storm. Analyst Barry Jonas noted that many investors were overly cautious.

Jonas pointed out that betting hold showed signs of improving towards the end of 2025 and suggested that early 2026 guidance from operators could be overly conservative. He contended that this measured approach could set the stage for upside surprises rather than disappointments. While legalization efforts have largely slowed, Maine remains a lucrative near-term prospect.

Despite industry apprehension, Jonas noted that higher taxes are unlikely to have a material impact. Prediction markets, however, represent an immediate challenge. The sector faces rising uncertainty, with platforms such as Kalshi facing ongoing legal battles. However, Truist notes that DraftKings and Flutter have the resources, flexibility, and market share to adapt to most scenarios.

The US Gaming Sector Remains Healthy

Truist has projected that the US interactive gaming market will reach$33.1 billion in 2026, potentially doubling by the end of the decade. DraftKings maintained its $45 price target, projecting an adjusted EBITDA of $940 million for 2026. State-level data revealed that DraftKings has gained some market share against rival FanDuel, further bolstering confidence.

Flutter also remains favored by analysts despite ongoing challenges. While Truist reduced its price target to $260, citing tax headwinds in markets such as the UK, Brazil, and India, the firm maintained its buy rating. Texas Capital Securities was even more optimistic with a $294 target, arguing that the operator’s relatively low valuation did not reflect its robust fundamentals, global diversification, and operational scale.
Analyst optimism extends beyond these two giants. Earlier this month, Jordan Bender from Citizens argued that broader gaming valuations were too pessimistic as investors are bracing for worst-case regulatory conditions that may never materialize. He was confident that the scale, discipline, and diversified revenue streams of established operators would help them deliver long-term growth.