Several sports betting stocks had a rough start to the week on Monday as they all fell in price. Most of the reason falls behind the news that college football is likely to be canceled.
To many people’s surprise, sports betting stocks have been performing well over the summer. There haven’t even been sports to bet on, but their stock prices kept climbing.
Much of this was because sports were going to return, but now that football might not, the story is different.
These are four gaming stocks that saw drops on Monday:
· DraftKings (DKNG) – as much as 12%
· Penn National Gaming (PENN) – as much as 8%
· Flutter Entertainment (PDYPY) – as much as 4%
· William Hill Plc (WIMHY) – as much as 4%
Penn National Gaming has been working on its Barstool betting app for its launch in September. They had planned to have it ready for college football season, but that effort may be all for nothing.
President of Barstool, Dave Portnoy, tweeted on Monday with hashtags #LetThemPLay and #letusbetwithournewapp. The betting app just planned to launch in Pennsylvania this year with other states to follow in early 2021.
A Fall Without Football
College football is one of the most bet on sports in the US. The popularity draws a lot of business for sports gaming companies, but they probably won’t have it this year.
Sports show host Dan Patrick has already announced that sources say they will cancel the PAC-12 and Big Ten football seasons on Tuesday. The ACC, among other conferences, still seems to be on the fence about continuing to plan for the season.
But the other worry could be the possibility of not having the NFL. Everything is going on as scheduled, but they will run into many of the same issues.
Unlike baseball, it is impossible to put social-distancing guidelines in place for football. Without a bubble, it is going to be hard not to continue to see positive COVID-19 cases.
The only positive is the money the NFL has, and that these are paid professionals. The NFL still has a chance, but it will be a story if one of the top players in the league has to miss two weeks.
Weathering the Storm
Not many would have thought that these stocks would have been doing so well at this point, so they have good odds of making it out just fine. They have had to become creative, generating new markets for their customers.
Companies like DraftKings have entered the world of esports, introducing gaming to their audience. This fall might be an opportunity to grow that following even more.
Experts believe that esports popularity is growing and will continue to do so. The growth was partly due to the lack of sports and because it was already on an upward trajectory.
DraftKings has an estimated $1.1 billion in the cash balance, so it will find a way to do without college football.
