Textual content dimension
Governor of New York Andrew Cuomo
Johannes Eisele/AFP by way of Getty Photos
New York Gov. Andrew Cuomo delivered an enormous win for sports activities betting corporations Wednesday, when he introduced that he now helps laws to make on-line sports activities betting authorized all through the state. Casino stocks and on-line sports activities betting gamers popped on the information.
DraftKings
inventory (ticker: DKNG) was up 3% to $49 on Wednesday, whereas
Penn National Gaming
inventory (PENN) was up 2.6% to $86.21. Shares of
Flutter Entertainment
(PDYPF), which owns each day fantasy sports activities and on-line betting agency FanDuel, gained 2.6%.
Caesars Entertainment
(CZR) was up 2%. The
Roundhill Sports Betting & iGaming ETF
(BETZ), an exchange-traded fund with publicity to sports activities betting and on-line on line casino video games, jumped 3.05%.
Analysts have pointed to state budget shortfalls attributable to Covid-19 as a catalyst for the enlargement of authorized sports activities betting and leisure hashish. Cuomo got here out in support of both on Wednesday, acknowledging the “historic finances deficit” spurred by the pandemic in a news release.
“New York has the potential to be the most important sports activities wagering market in america, and by legalizing on-line sports activities betting we goal to maintain hundreds of thousands of {dollars} in income right here at house, which can solely strengthen our skill to rebuild from the [Covid-19] disaster,” he added.
Whereas sports activities betting is already allowed at sure upstate New York casinos, lawmakers have pushed to permit on-line wagering elsewhere. Cuomo had previously pushed back in opposition to such efforts.
The governor mentioned that underneath his proposal, the New York State Gaming Fee would license sports activities operators or platforms to supply cell sports activities betting. They would wish to have a partnership with an current licensed business on line casino.
JPMorgan analyst Daniel Politzer famous on Wednesday that each DraftKings and Caesars Leisure have relationships with brick-and-mortar business casinos.
He added that DraftKings “stands to profit from bettering economies of scale by monetization of its current advertising and marketing spend to penetrate the New York space market.”
“In New Jersey, DKNG’s sports activities betting market share is ~25%,” he wrote. “We additionally might envision a state of affairs whereby New York legalizing [online sports betting] might drive laws in neighboring states, which might be materials given the excessive proclivity to gamble within the Northeast (primarily based on lottery spend).”
Evercore ISI analyst Kevin Rippey wrote in a Wednesday observe that New York might ultimately signify a $1.3 billion sports activities betting market, assuming it launches by 2023. Rippey has an Outperform score on DraftKings inventory with a $60 value goal.
Write to Connor Smith at connor.smith@barrons.com
