American online sports betting company DraftKings recently reported to take a bruising hit. The news is concerning for DKNG stock investors as it potentially be deciding the further course of the company.
According to an analyst, DraftKings was supporting an initiative demanding the online sports betting in California be regulated. This was being taken as a fantasy sports company’s effort to enter the state. And the results of this election in disfavor of what the company was promoting.
The New York Times reported, after 69% of overall voting, a significant 83.2% of the voters voted against the initiative seeking mobile sports betting regulation. While only 16.8% of the total votes were in favor of the regulation demand—propagated by DraftKings.
The analyst claimed betting companies like DraftKings and FanDuel have spent around 200 million USD to support their campaign. However, the competitors which are the existing rightful operators in the California region have pushed back hard. They spent even more, about 230 million USD, against the initiative to take outsiders away from their markets. These companies did not want the foreign players to enter and share their revenue.
Results of these elections are not positive for DraftKings stock price and its investors. The disparity between people rejecting the proposal and accepting it is so huge that it does not even leave an opportunity for the betting company to enter the state even in near future, the analyst added.
Losing California for now and its distance from the region is likely to act as a loss for DraftKings like betting companies. It is counted among one of the largest revenue aggregators in the United States. Moreover, it has a huge gaming accustomed population and people with reasonably high income.
California could have acted as an opportunity for the betting company to shoot up the stock price, for which it has to wait. The stock has performed well and the company’s financials also turned out better than estimates in the recent earnings release of Q3 2022.
According to TheCoinRepublic report, DraftKings generated revenue worth 502 million USD in Q3 2022 which was better than both the last year’s revenue and the estimates. In terms of earnings the company did way better than last year as well as its forecasts. It is reported to generate about 502 million USD in revenue.
Despite the overall performance, DraftKings stock price tumbled. However, it took a lead and surged in the coming days. At the press time DKNG stock is trading at 14.88 USD after 9.09% increase in a day.
Source: https://www.thecoinrepublic.com/2022/11/13/draftkings-stock-likely-to-suffer-the-election-results-analysts/