(BofA) – On-line Sports activities Betting Enlargement Prospects Bode Effectively for DraftKings, Penn Nationwide
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The prospects for enlargement of on-line sports activities betting within the coming yr bode properly for
New York Gov. Andrew Cuomo despatched a constructive sign about on-line sports activities betting within the Empire State throughout a Wednesday press convention.
New York faces a $15 billion finances gap, and Cuomo stated he’s reluctant to boost taxes earlier than Congress can agree on offering aid to states and localities. Till then, there could be different methods to fill that hole, together with legalized pot and on-line sports activities betting.
“Are there other ways to get revenue? How about marijuana? How about sports betting?” Cuomo mused.
Bank of America
on Friday raised its price targets on each firms, saying development in newly permissible states Michigan, Virginia and Tennessee and the prospect of additional openings in locations like New York, Ohio, Massachusetts and Connecticut “provides an ongoing catalyst path and momentum.”
(BofA) analyst Shaun Kelley raised DraftKings’ price goal to $60 from $55 and Penn’s to $101 from $85.
Shares of DraftKings (ticker: DKNG) fell 2.4% to $53.90 on Friday, whereas shares of Penn Nationwide (PENN) rose 0.4% to $91.94.
On-line sports activities betting has gained acceptance as extra states open their doorways to sportsbooks and igaming. With folks caught at residence, sports activities again on TV, and casinos closed or compelled to scale back capability, on-line gaming has taken off.
November on-line sports activities betting rose 8% from October and 81% over final yr’s November, Kelley stated. DraftKings shares are up greater than 400% this yr, whereas Penn Nationwide is up 259.7%, in comparison with the 14.8% acquire within the
A giant catalyst for the sector can be touchdown an enormous state like New York, the place sports activities betting is authorized however not on-line sports activities betting like in neighboring New Jersey.
Gov. Cuomo’s historic opposition to on-line sports activities betting was “seen as a key roadblock,” Kelley stated. However the pandemic has modified that.
New York is the fourth most populous state, with an estimated $1.three billion to $1.7 billion addressable market, Bank of America stated.
And a constructive resolution by New York might stress close by states like Massachusetts, Connecticut and even Ohio, “which seems increasingly unlikely to pass in 2020,” Kelley stated.
Momentum on a cell sports activities betting invoice in Ohio just lately stalled within the state legislature.
Write to Liz Moyer at Liz.Moyer@barrons.com