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Why DraftKings Stock Is Up Today

What happened

Shares of DraftKings (NASDAQ: DKNG) jumped 5.5% early Wednesday before settling back to a gain of 2.1% as of 11 a.m. EST.

Several news items boosted the stock that has already gained almost 14% just since the start of 2021.

So what

The online sports betting company announced the first 2021 launch of its sportsbook and casino mobile app in a new state yesterday. DraftKings' growth into Michigan comes after data from Pennsylvania showed record betting business there for the company in December.

Image source: Getty Images.

DraftKings surpassed $100 million in bets in Pennsylvania in December, its fourth consecutive month doing so. The company handled a record $131.5 million in bets, with $5.4 million in revenue. Promotional credits prevented revenue from passing the November 2020 level.

Now what

Its launch into Michigan on Jan. 22 will mark the 11th state with DraftKings' mobile sports betting app. The move is through a deal with Bay Mills Resort and Casinos, the longest-operating gaming facility in the state.

Separately, DraftKings said yesterday that it is teaming up with sports website Bleacher Report to offer a Super Bowl LV proposition, or prop, bet reveal show that will stream live on Bleacher Report's app. Prop bets are made on specific events or players, and not the overall outcome of the game. DraftKings will be offering over 200 different prop bets for the Super Bowl, it said in a statement.

Investors in DraftKings should be happy with the announcements. But there is also growing competition in the space. Pennsylvania, for example, listed more than a dozen sports betting operators in December 2020. As with any investment, research on valuation and the competition for DraftKings should be ongoing as its growth story plays out.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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