Sep 10, 2017; Detroit, MI, USA; A detailed view of a football and pylon before the game between the Detroit Lions and the Arizona Cardinals at Ford Field. Mandatory Credit: Tim Fuller-USA TODAY Sports

Sports betting stocks jump ahead of NFL season

The kickoff of the new NFL season gave stock prices for sports betting operators a jolt in Thursday trading.

Thursday’s NFL season kickoff provided strong incentive for investors as Caesars Entertainment Inc., Draft Kings Inc. and Penn National Gaming Inc. were all up on the day.

Caesars saw the smallest gain just under one per cent, up 46 cents to $50.74. Draft Kings saw a five per cent rise jumping $2.16 to $42.54. The big winner on the day was Penn National, which leapt up seven per cent, gaining $4.31 to land at $62.46.

Stock analysts expect Draft Kings and DKNG to be among the leaders in online betting due to their first-mover advantages. However, analysts are also keeping an eye on Penn National following their $163 million deal to acquire 36 per cent of Barstool Sports, which could help them gain a high share in the online betting industry.

Why did sports betting stock move?

The return of the NFL should deliver a significant boost in business for sports betting operators who watched helplessly as business dried up for a period in March after the COVID-19 pandemic shelved almost all sports.

Sports betting has picked up since the MLB, NHL, and NBA returned, but betting on the NFL practically surpasses all of them put together.

A survey released by the American Gaming Association found that an estimated 33.2 million Americans will bet on the NFL this season. The AGA also estimated that Americans spent $95 billion betting on the NFL in 2015. Since then sports betting has been legalized in several states which the AGA believes will only cause this number to grow steadily.

The latest AGA numbers estimate that 34 per cent of bettors will make their bets online through state run or offshore sportsbooks, 20 per cent will make their bets at brick and mortar sportsbooks, and 26 per cent will make bets through fantasy football and football pools.