DraftKings, Other Gambling Stocks Surge as New York Gets Closer to Online Sports Betting
David L. Ryan/The Boston Globe via Getty Images. Pictured: Entrance to DraftKings’ Boston offices.
Gambling stocks popped on Wednesday morning as news circulated that online sports betting would be part of Gov. Andrew Cuomo's upcoming plans for New York.
In the first 90 minutes of trading, DraftKings stock was up 5.6% and Penn National stock went up 5.9%. Roundhill's Sports Betting & iGaming ETF was up 3.3%.
"This means an acceleration of the previously contemplated timeline for New York online betting," Will Hershey, the co-founder of Roundhill, told the Action Network on Wednesday. "It also opens up one of the big four — New York, California, Florida and Texas — each more than two times the size of New Jersey. And finally, it suggests that more states may push forward regulation timelines due to similar budget constraints."
It's unclear how soon online sports gambling will come to New York, but New York State senator Joseph Addabbo said he believes it's as easy as placing the servers at currently legal retail sportsbooks in the state.
Neighboring New Jersey broke the all-time monthly handle record by bringing in $930 million in sports bets in November and broke of the all-time yearly sports betting handle record of $5.3 billion (Nevada, 2019).
Cuomo said in a statement released Wednesday morning that he hopes sports gambling could help bridge the budget gap widened by the impact of COVID-19 and that he hopes to keep tax revenue in state instead of in New Jersey (or offshore).
Two sports books — Fox Bet and Caesars — have deals in the state lined up in anticipation of online gambling, while four sportsbooks have retail book relationships in the state — DraftKings, FanDuel, Rush Street (BetRivers) and BetMGM.
"I'm absolutely delighted to see the support from Gov. Cuomo," said Adam Greenblatt, BetMGM CEO said, in a statement provided to The Action Network. "Legalizing sports betting has the potential to bring leaking tax dollars back to New York from offshore books and nearby states. We're eagerly awaiting next steps and have every intention of working closely with regulators in New York to bring BetMGM's leading digital offering to the state."
How would you rate this article?