Voters said yes to legalizing sports betting in all three states where the question was on the ballot: Louisiana, Maryland, and South Dakota.
Video Transcript
SEANA SMITH: A number of other ballot initiatives were under consideration yesterday, and one of those– sports betting. DraftKings– you can see it in the reaction in the stock today, with shares up just around 5%, and other gambling stocks are getting a boost. And this is because states legalized sports betting and other gambling measures. Dan rapped– Dan Roberts is following this for us. And Dan, what can you tell us about this?
DAN ROBERTS: Yes, Seana. So last night, specifically legal sports betting was on the ballot in three states. And all three states said yes– Louisiana, Maryland, and South Dakota. Now, it’s interesting there. It wasn’t like a 90% type thing. It was 60% in one case, 59% in another. So we’re not talking about a crushing yes, but we are talking about decisive yes votes.
Now in Louisiana, they vote based on parish. So each individual parish votes. And in all but 10 parishes, they voted yes. So add three states to the list, and it brings you to a total of 27 states in the US that now either have launched some form of legal sports betting, or have voted yes, which means they will launch it.
Now of course, these newest three states– it’s going to take a little bit. They don’t just flip the switch. There will be a little bit more follow-up legislating that has to be done. For example, what’s the tax rate going to be? Since so many states choose to legalize this, because they see a state tax benefit. But it does mean that they’ll probably come online and go live in some form or another in 2021.
So 27 states– and I guess it depends on your opinion, if you think that’s a really large number or not. Remember, it took until 2018 for the Supreme Court to strike down the federal ban, which then allowed states to move to legalize sports betting in their own state.
Now you did mention last night the other initiatives. Those were three states that did vote yes also– separate from sports betting– to expand casino gaming in their state. But sports betting– 27 states. Pretty interesting. You can see where the domino effect is happening, where the momentum is.
ADAM SHAPIRO: Dan, I’m curious. Have investors who might want to get in on, say, like a DraftKings, or other firms that are going to take part in all of this– did they miss the opportunity? Or are we still at the beginning of this? Because as you say– what, 27 states– with more on the block.
DAN ROBERTS: Well it’s a really interesting question, Adam. I mean, these names– you know, Seana mentioned DraftKings– there’s also Penn Gaming, which is a majority owner of Barstool Sports. And they launched a sportsbook in Pennsylvania quite recently. These names are very headline driven.
So, you know, I’m hesitant to say that the gains are done, but we also don’t advise people to buy certain stocks on our shows. I will say, though, they move big– up or down– based on single-day headlines with sports.
You know, back when Major League Baseball finally got its kind of “mini” season up and running amid the pandemic– its 60-game season– one week in, the Marlins had a big COVID outbreak. DraftKings and Penn Gaming went down big. Then the NFL season started. College football season started. DraftKings and Penn Gaming went up big. So they are subject to fluctuations based on headlines.
I also think, you know, even though we talk about those two names a lot– there’s Penn Gaming, there’s DraftKings. There’s FanDuel, which is now owned by Flutter Entertainment. MGM is in this race– BetMGM. So there are a lot of these names that are going to benefit from the tide of legalized sports betting. It’s unclear which of them will be the ultimate winner and benefit the most.
