The last week has been huge for the New York gambling field as Governor Andrew Cuomo and the state’s legislature have officially approved mobile sports betting to be part of the new fiscal year budget. Analyst Daniel Adam believes that casino giants DraftKings and FanDuel have an advantage over other gambling operators who are ready to explore the newly-created gaming markets.
The subject of mobile sports betting in the state has been quite extensive as the state’s government is looking to close the budget gaps caused by the unprecedented situation. Additionally, the jury was still out on what kind of operational model the state should adopt – gov. Cuomo’s state-run one or the open market will allow much greater variety.
Pole Position
Reports suggest that eventually, four or more gambling operators will be able to enter the state’s markets after a competitive bidding war. According to analyst Daniel Adam industry titans, DraftKings and FanDuel are in pole position for the launching of new sportsbooks with the introduction of the new legislation. Whereas Penn National Gaming who has an agreement with Rivers Casino is falling behind.
DraftKings already has great relations with a NY tribal casino thanks to its sportsbook at del Lago Resort & Casino. It is believed that this would put the operator in a favorable position as the bidding process will favor operators with already established tribal casino connections. This Thursday, shares of DraftKings rose 0.6%% and are already up by 32% this year. Mr. Adam put a US$105-price target on the company’s shares.
Oppenheimer analyst Jed Kelly also predicts that the two gambling operators are among the favorites for the sportsbooks and believes that both will benefit from the trend. Mr. Kelly has put an US$80 price target on DraftKings stocks this Wednesday. Another reason as to why he backs them that both companies are already reaping success in the neighboring New Jersey.
FanDuel is one of the largest betting operators in the country. Back in December last year, its owner company the Ireland-based Flutter Entertainment has increased its stake to 95% as a result of a US$4.2 billion deal. Last month the parent company has become a subject of huge speculations as there were rumors that it has considered listing a part of FanDuel.
Budget Inclusion
At the beginning of this week, Governor Cuomo and the New York state legislature have informed that mobile sports betting for the state has been officially included in the budget. Various reports claimed that the authorities have gone with the governor’s plan of a state-run limited-operator model. However, more information on the subject is yet to be released to the public.
Another Obstacle
Despite the obvious positive aspects, the introduction of mobile sports betting can have on the state, last week a concerning issue emerged for the state. The budget plan will see Oneida Nation left out from the proposed gambling legislation. If that becomes a fact, the tribal corporation might suspend its payments to the state as it deems the decision as a violation of the 2013 exclusivity agreement.
Source: Moyer, Liz “New York’s Mobile Sports Betting Gambit Hands DraftKings an Ace, One Analyst Says” Barron’s, April 8, 2021
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