Why Sports Betting Stocks Are Suffering

 Why are Sports Betting Stocks Suffering?


The November of publicly traded gaming companies has been very difficult, with everything from DraftKings and Flutter to Penn. Let's take a look at what's happening.

The pandemic was a disaster for those who had invested in gambling companies. The gains of those holding these stocks today have been reduced by a lot.


Three of the largest publicly traded stocks for sports betting have been crushed this month.


Flutter Entertainment ($PDYPY), parent company of FanDuel traded at 100.48 on October 26th, but has dropped more than 25% in the past year

Penn National Gaming ($PENN), the parent company of Barstool Sports has seen a 31% drop in its past month

DraftKings ($DKNG), has fallen nearly 26% during the same time period.

Boardroom was able to hear Scott Cooley, president and CEO of CoolMedia PR, explain that he has been working with numerous offshore and domestic sportsbooks ever since PASPA (Professional and Amateur Sports Protection Act), was overturned in May 2018.


Everyone is trying to grab a piece the sports gambling market, but MGM Gaming, FanDuel and DraftKings are capturing the majority of the market. The cost per acquisition can run up to $1500 to $2,000 per player. If a lot these players are $10-$20 gamblers, it just doesn't make sense. These stock numbers weren't sustainable in today's market conditions. As a result, I think we might see some massive marketing campaigns scaled back in near future.


Anyone who listens to radio or watches sports on TV has been inundated by advertisements from gambling companies. The market is realizing that there is a finite amount of people willing and able to gamble on a regular schedule. Most of these individuals have already signed up for gambling in states that allow it or are about to.


This means that there is more money being spent on marketing to sign up less players. Wall Street is realizing that many of these companies were overvalued during the pandemic that began in March 2020.


Penn National Gaming was trading at $7.89 a share. The stock was last traded at $7.89 per share on March 8, 2012. It was $130.47 by March 8, 2013. However, its price has declined significantly in the past five weeks, dropping nearly 10%.


Caesars Entertainment traded today in the $94 range of shares after hitting an Oct. 1 high of $119.49.


MGM Resorts International traded today in the $43-$43 range, having been trading above $50 per share since Nov. 5.


It is difficult to predict the market, they say. This one is one insiders know, especially since Q3 earnings reports were lower that expected. The chart below shows the percentage split for Gross Gaming Revenue. This gives you a fantastic breakdown of which companies have succeeded in this space and which ones are struggling. Why a Lot of Sports Betting Anyone?

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