Why Are Sports Betting Stocks DKNG, PDYPY, PENN Up Today?


  • Sports betting stocks are rallying as Massachusetts is set to legalize sports gambling.
  • DraftKings (DKNG) is leading the charge, up 8%, followed by Penn National Gaming (PENN), up 4.5%.
  • There will be some limitations related to betting on in-state colleges, but the House and Senate have come to an agreement and now await the governor’s signature.
Sports betting stocks - Why Are Sports Betting Stocks DKNG, PDYPY, PENN Up Today?

Source: sutadimages / Shutterstock

Sports betting stocks are in focus on Tuesday. That follows reports that Massachusetts is set to legalize sports gambling and online games. It helps that growth stocks are trading well on the day, which gives this group an extra boost in momentum.

Specifically, DraftKings (NASDAQ:DKNG) is leading the way, with shares up about 8% on the day. While off the session high, when it was up 10.4%, it’s still today’s leader among the group. Penn National Gaming (NASDAQ:PENN) is also trading higher, up about 4% on the day.

Those are the most correlated plays, although we’re also seeing a rise in stocks like MGM Resorts (NYSE:MGM), Caesars Entertainment (NASDAQ:CZR), Wynn Resorts (NASDAQ:WYNN) and others.

Perhaps not surprisingly, Massachusetts and Boston specifically are focal points for Barstool Sports’ Dave Portnoy. In January 2020, Penn bought a 36% stake in Barstool with thresholds in place to increase that stake over time.

Will that lead to more traction for Penn because of Barstool Sports and Dave Portnoy’s presence within the Massachusetts market? It’s certainly possible, but of course it’s not that simple. Portnoy may drive traction, but don’t forget that DraftKings is headquartered in Boston.

Here’s the Skinny on Sports Betting Stocks

In the world of online sports betting, the rules tend to be pretty cut and dry. Gamblers are either eligible or they’re not. The league and teams one can bet on are they same: Either they are eligible or they’re not.

But that’s not the case in Massachusetts.

After the House and Senate went back and forth, they seem to have come to an agreement on Monday. While online and retail betting will be permitted for professional and amateur sports, it’s a little more complicated when it comes to betting on in-state colleges.

As long as residents are 21 or older, not using a credit card and use a licensed sportsbook, they can bet on in-state colleges that are taking part in a “collegiate tournament.” Otherwise, betting on in-state colleges will not be allowed.

The tax rate in Massachusetts will be lower than surrounding East Coast states — 15% for in-person wagers and 20% for online bets. Those taxes will be paid by the sportsbook operators, not by the betters.

Now everyone is awaiting Governor Charlie Baker to sign the bill. The expectation is that he will sign the bill, and he has 10 days to do so.

On the date of publication, Bret Kenwell 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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell

Article printed from InvestorPlace Media, https://investorplace.com/2022/08/why-are-sports-betting-stocks-dkng-pdypy-penn-up-today/.

©2024 InvestorPlace Media, LLC