It’s been two weeks since the Ontario iGaming market went live on April 4. DraftKings (NASDAQ:DKNG) was missing from the initial list of 14 operators given licenses by the Ontario government to operate iGaming businesses in the province. As of April 19, the company is still missing from the 21 sites approved for iGaming. At first glance, that’s not good news for DKNG stock.
Sometimes, however, it’s not an advantage to be the first into the fray. If you own DraftKings stock or are thinking about buying DKNG, showing up late to the party might not be such a bad thing.
What investors should know about the Ontario market is it’s one of the biggest in North America. That’s why 30 operators could soon be up and running — including DraftKings — with approximately two-thirds focused on sports betting. Compared to the Ontario opening, only four operators launched on Jan. 8 when single-event sports betting became legal in New York. DraftKings was one of the four. The three other original competitors in New York are already operating in Ontario.
As for dollars and cents, the Ontario single-event sports betting will grow to 28 billion CAD ($22.2 billion) by 2026. In 2022, the Ontario government projects that the province will generate 800 million Canadian Dollars ($634.2 million) from sports betting.
The competition will be cutthroat, with operators from Canada, the U.S. and Europe vying for a piece of a huge pie. Most of the operators come with deep pockets and significant online gaming experience. DraftKings will soon be one of them.
Just as the Ontario government took three months longer to get iGaming up and running in the province because it wanted to make sure both the bettors and operators were happy with the setup, DraftKings is most likely happy to see how things play out before it enters the fray.
Already providing sports betting in 17 states, it’s got plenty to keep it busy until it’s ready to launch. Some online chatter raises the possibility that it’s having troubles with its license. I find that hard to fathom, given the company’s already got the green light in New York state.
Despite the heated competition, it should be able to grab market share in the Ontario market in the first year of operation. Be patient. Ontario will see DraftKings make a splash soon enough.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
