Investors may want to keep a closer eye on Draftkings Inc stock (NASDAQ: DKNG) after the state of New York indicated it is open to granting licenses for mobile sports betting companies to operate, The Wall Street Journal reported.
New York is a ‘massive market’ for DraftKings
DraftKings along with rival sports betting sites FanDuel are expected to submit their respective applications to the New York State Gaming Commission in the coming weeks. But there is a catch as government officials are demanding sports betting companies share at least 50% of revenue collected in the state. This number could ultimately rise to as much as 60% or 65% if the bidding process becomes competitive.
Nevertheless, state officials believe that “one way or another” DraftKings and its rivals will accept the state’s terms. Robert Mujica, a fiscal adviser to Governor Andrew Cuomo, said New York represents a “massive market” for the major players. Online sports betting was legalized in April as part of the New York State budget
DraftKings CEO Jason Robins said in June at a Goldman Sachs conference that it is “excited and hopeful” to become “one of the handfuls of operators” in the state.
DraftKings stock weakness
Shares of DraftKings peaked near $75 in early 2021 and are now trading at around $46 per share. The company is a leader in the mobile sports betting industry although its expansion plan may be taking longer than some investors initially expected.
The US Supreme Court gave the green light for states to authorize sports betting in 2018 — if they chose to do so. Since then, 31 states and the District of Columbia have legalized sports betting, although not necessarily on mobile platforms.
