DraftKings shares rise after the broadcaster’s takeover, but New York hopes they fade

Online sports betting provider DraftKings (DKNG) announced Tuesday that it has acquired sports betting video broadcast company Vegas Sports Information Network. The DraftKings share rose.


VSiN is a cross-platform broadcast and content company that delivers news, analysis and data on sports betting. It was launched in 2017.

VSiN, based in Las Vegas, produces up to 18 hours of content a day. In addition to its 24/7 stream, VSiN’s original content is accessible through multiple video and audio channels, including Comcast (CMCSA) Xfinity, Sling TV, FuboTV (FUBO) and MSG networks (MSGN).

The acquisition will enable DraftKings, which goes live in 14 states, to further develop its content capabilities and expand VSiN’s ability to expand its audience while expanding legal sports betting in the U.S., the companies said in a joint press release With.

“VSiN creates authentic and believable content that will resonate with sports bettors at all levels, whether they’re experienced or new to sports betting,” said Jason Robins, CEO of DraftKings, in a statement.

VSiN’s current talents include legendary sports broadcaster Brent Musburger and former NFL manager Michael Lombardi.

In a message to customers, Jefferies analyst David Katz says that the purchase “does not significantly change the path to profitability in the short term, but positions DKNG for higher profitability in the longer term”.

VSiN is expanding DKNG’s customer acquisition channel and could achieve greater efficiency in customer acquisition in the future, says Katz.

DraftKings already has broadcast partnerships Disney’s (DIS) ESPN and Dish Networks (DISH). It is also an official partner of the NBA, MLB, NFL, NASCAR, UFC and PGA Tour. In addition, on March 29th, DraftKings announced an exclusive licensing agreement with the WWE.

Meanwhile, MGM Resorts’ (MGM) BetMGM announced on Tuesday that it will integrate content into Audacy’s sports radio stations and digital platform.

Audacy owns and operates 39 all-sports stations in the United States. It’s also the flagship of 41 professional teams and over 50 Division 1 college programs, including the New York Yankees, Dallas Cowboys, Golden State Warriors, and the University of Michigan.

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NY weighs in on DraftKings floor

Stocks rose nearly 5% to 61.07 on the stock exchange today, trying to regain their 50-day line. DraftKings stock saw some big gains from the 50-day line in February and March, hitting a 52-week high of 74.38 on March 22nd, according to MarketSmith chart analysis. But those gains have evaporated and have sparked some round-trip sell signals.

DraftKings stock has an RS rating of 91 and an EPS rating of only 27 because the company is not yet profitable. Relative strength is back on the uptrend after a sharp decline in mid-March.

Among other gambling stocks with high exposure to online sports betting, MGM Resorts rose 3.7% on Tuesday Penn National Gaming (PENN) rose 2%.

DraftKings’ stock was at 8.5% on Monday after reports that New York Governor Andrew Cuomo and other lawmakers are at a stalemate over who would run the system

New York appeared to be on the verge of approving mobile sports betting. Now the time is running out for the legislation to be included in the next budget. The deadline is April 1st.

Revenue sharing upon issue

On Monday, a report by Deutsche Bank currently listed New York in the category of states unlikely to be legalized. Analyst Carlos Santarelli said in a statement to customers that while Cuomo prefers mobile betting through the state lottery, some lawmakers “want a multi-skin model in the hands of commercial operators”.

If Cuomo prevailed, companies like DraftKings and Penn, which run the mobile sports app Barstool, would have no role. Santarelli added that lawmakers would have until June 10 to pass stand-alone laws if external operators weren’t included in current legislation.

There is a lot at stake. According to research by industry tracker PlayNY, an open market could have $ 37 billion in betting, $ 2.5 billion in operator revenue, and more than $ 300 million in tax revenue in the first four years of launch US dollars. A closed market could generate $ 7.5 billion in bets, $ 750 million in revenue, and $ 375 million in revenue for the state.

“The bottom line is that we believe that an open market will provide greater benefits to the state and its residents,” PlayNY analyst Dustin Gouker said in a statement. “But a closed market should generate more revenue for the state, and that is tempting for policymakers.”

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.


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