A leading sports betting company is seeing its stock improve as the NFL season begins.
Yesterday marked the beginning of the NFL 2022 season with the first game between the Buffalo Bills and the Los Angeles Rams.
Sports betting appears to be getting a boost from the start, receiving an 11.9% bump in stock prices in the past week.
DraftKings stock spiked 39.1% between July 26 and August 15 before dropping 25.5% by September 2, aided by the NFL preseason. The spike was a much-needed increase after an 81.2% drop from September 2021 to July 2022.
Why it’s news
DraftKings is seen as one of the leading sports betting operators in the United States. With 2022 set to be a major year for sports betting, a bump in its stock price could be a good sign for the immediate future of the industry as the appetite for sports betting increases.
“This football season is slated to see a record number of Americans placing bets on their favorite teams, according to the American Gaming Association. Nearly 47 million people said they plan to bet on the NFL this year, representing 18% of all American adults. Of those, 23 million plan to bet online, up 18% from 2021,” says Barron’s.
“The rising appetite for betting could be a boon to DraftKings. The company canvassed 27% of online sports betting market share in June and July, second only to competitor FanDuel.”
Backing up a bit
Sports betting is a billion-dollar industry in the United States which was valued at $76.75 billion in 2021 and is expected to grow to $83.65 this year.
Legalized sports betting is permitted in 30 states and the District of Columbia.
“The global sports betting market is expected to grow at a compound annual growth rate of 10.2% from 2022 to 2030 to reach $182.12 billion by 2030,” says Grand View Research.
Analysts in the meantime are sending mixed signals as they advise whether to pursue DraftKings stock while it is volatile.
“Despite the encouraging trends in the industry, [Truist analyst Barry] Jonas maintained a Hold rating on the stock. But other analysts on Wall Street have taken a more optimistic view on DraftKings as the NFL season begins Week 1. Roth Capital Partners upgraded its rating to Buy from Neutral in mid-August, with analyst Edward Engel highlighting DraftKings’ app growth as a path to profitability in the near future,” says Barron’s.