Since the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, sports-betting companies have benefitted.
As of the end of May 2022, 30 U.S. states and Washington, D.C. now offer some form of legalized sports wagering, according to the latest tally from the American Gaming Association.
In the four years since legalization, Americans have wagered over $125 billion on sports as betting morphed from a taboo topic on sports television to commentators openly discussing gambling odds before and during games.
Several sports-betting operators are also publicly traded companies, and some include non-sports betting assets in their business portfolios, such as casinos or entertainment properties.
This is how those sports-betting stocks performed in May:
On May 5, DraftKings completed its purchase of Golden Nugget Online Gaming in the company’s latest move to boost revenue and lower costs. The acquisition was an all-stock deal valued at about $450 million, a company spokesperson told MarketWatch.
“We anticipate that this acquisition will provide meaningful revenue uplift,” DraftKings CEO Jason Robins said in a statement.
The move will allow sports betting and online gaming company DraftKings to expand its iGaming product offerings, and increase the new company’s marketing efficiency, the DraftKings announcement claims.
At its latest earnings, DraftKings reported a first-quarter loss of $467.7 million, compared with a $346.3 million loss a year prior. DraftKings’ stock price target was cut to $24 from $32 at Oppenheimer.
DraftKings is down 72.87% over the past 12 months.
Shares of Caesars Entertainment Inc.
plummeted 26.6% in May.
Like DraftKings, Caesars is one of the many approved sports betting operators in New York state, which in recent months has become the top state in terms of total sports betting handle, according to publicly available data compiled by LegalSportsReport.
“In less than half a year, New York has become a leader among states in implementing successful gaming policies, with hundreds of millions of dollars going to important programs that will improve the lives of all New Yorkers,” New York Gov. Kathy Hochul said in a statement. “I am committed to upholding responsible and effective gaming policies that will move the industry forward and continue to drive our state’s economic growth.”
Caesars was one of the top sports books in New York when the state allowed online legal sports betting for the first time earlier in 2022.
During the company’s first quarter earnings, Caesars reported a net loss of $680 million, after a loss of $423 million in the same period of 2021. Caesars Entertainment’s stock price target was cut to $149 from $183 at B. Riley
Caesars stock is down 53.31% over the past 12 months.
Shares of Penn National Gaming Inc.
dropped 15.23% in May.
Penn CEO Jay Snowden saw his total compensation jump to $65.89 million in 2021, up from just $3.90 million in 2020.
The betting operator reported a 23% first-quarter revenue jump to $1.56 billion, above analysts’ estimates of $1.53 billion, according to FactSet.
“PENN’s 1Q22 earnings report clearly showed us more positives versus negatives,” Stifel analyst Steven Wieczynski wrote in a research note. “Not even sure we would call this a negative, but it might be viewed that way to some as there was margin erosion for the second straight quarter.” Penn National Gaming stock price target was cut to $50 from $61 at Stifel Nicolaus.
Penn’s stock is down 61.01% over the past 12 months.
Other sports betting news
The Justice Department sued casino mogul Steve Wynn, former CEO of casino operator Wynn
Resorts, to compel him to register as a foreign agent. Wynn is accused of lobbying the Trump administration in 2017 at the behest of the Chinese government.
Cory Zeidman, a World Series of Poker winner, was recently accused of taking large fees for insider trading betting tips that he either made up or found on the internet. About $25 million worth of promises of “sure bet” insider info on sports betting events was accumulated by Zeidman.