Sports Betting Meets Stocks Betting
DraftKings is an explosive growth story, huge in sports betting, and days from a mega reverse merger. That means the company, currently private, will merge with a smaller company, currently listed. It’s a backdoor route onto the stock exchange, very clever! It’s not as dramatic as an initial public offering (IPO), but investors are stoked nonetheless!
DraftKings competes with FanDuel to ride the online American wave of sports betting legalization, and so far, so good. The value of all bets placed (the ‘handle’) on everything from college basketball to the Superbowl has rocketed into the billions in a matter of months, Pennsylvania and New Jersey being the two earliest adopting states.
The barnstorming popularity of sports betting has made it a gold mine for state coffers, entitled to a share of its revenues just like in the casino business. Sooner or later, analysts reckon the majority of folks around the country will be freely encouraged to wager.
New Jersey’s sports betting market is expected to catch up to the size of Nevada’s longstanding industry soon, so Invstrs have Flutter Entertainment on their watch lists. It’s the owner of FanDuel, DraftKing’s main competitor (and failed merger partner in 2017).
As for the timing of DraftKing’s public debut with coronavirus, that’s where nobody agrees. There’s no ducking the fact that with no balls being kicked or crunching tackles being made at the moment, there’s nothing to bet on, and that can’t be good for these companies’ bottom lines.
However, when sports do recommence, there won’t be any crowds. Social distancing measures will stay in place, so everyone will be stuck at home watching. That means, potentially, people will be more likely to pick up their phones and gamble. How do you see it playing out?