PWSHub News

DKNG Stock Alert: DraftKings Strikes Deal With Barstool Sports

Investors digest a causation-or-correlation argument

February 12, 2024 Feb 12, 2024, 12:55 pm EST February 12, 2024

DKNG stock - DKNG Stock Alert: DraftKings Strikes Deal With Barstool Sports

Source: Postmodern Studio /

On paper, online sportsbook DraftKings (NASDAQ:DKNG) secured a meaningful long-term catalyst. Late Sunday, following the end of the Super Bowl, Barstool Sports founder Dave Portnoy confirmed that the sports-oriented blog signed a multi-year deal with DraftKings. Though the recently concluded NFL championship saw record-breaking gambling interest, concerns related to the repeatability of the performance may have weighed on DKNG stock.

According to Investor’s Business Daily, the new partnership arrives before DraftKings releases its fourth-quarter earnings report late Thursday. Neither party disclosed financial terms. However, prior reports from Sportico indicate that the deal would encompass a traditional marketing partnership. This framework may involve Barstool promoting DraftKings odds. In return, Barstool would benefit from the sportsbook’s customer referrals.

Previously, Barstool declined to lend its brand to a sportsbook or a betting app. Further, earlier reports suggested that DraftKings would pay Barstool in the “low eight figures per year.”

Fundamentally, the long-term narrative seemingly bodes well for DKNG stock. As IDB reported, gambling interest spiked ahead of Super Bowl LVIII. This game represented the first NFL championship that Las Vegas hosted. Ahead of the big matchup between the Kansas City Chiefs and the San Francisco 49ers, analysts projected that a record 67.8 million American adults would bet on the game.

A Strong Economy or Taylor Swift? DKNG Stock Faces a Quandary.

According to the American Gaming Association, the record projected gambling figure printed a 35% jump from 2023. Additionally, this statistic represented 26% of the eligible population. In terms of dollar amount, analysts anticipated that betters would wager $23.1 billion on the game, a 45% jump from the $16 billion posted last year.

Perhaps most relevant for DKNG stock, people participating in casual wagers with friends or part of a pool or contest clocked in at 36.5 million people, a rise of 32%. And about 28.7 million adults (11% of the population) planned to bet via a legal U.S. sportsbook. Therefore, DraftKings theoretically will enjoy an expanded total addressable market, especially with the Barstool partnership.

However, the reason that DKNG stock may be slipping on Monday after the Barstool news could come down to the correlation-versus-causation debate. Barstool was not able to partner with DraftKings until after the Super Bowl due to a lockup agreement as part of its separation from Penn Entertainment (NASDAQ:PENN). As a result, DKNG shareholders must hope that future Super Bowls will generate similar interest.

Naturally, the hope is that the robust economy represents the key driver for the gambling spike. However, it’s also possible that interest spiked because of pop superstar Taylor Swift. As CBS News noted, StubHub reported a nearly three-times jump in ticket sales for Chiefs home games. Swift is in a relationship with one of the Chiefs’ key players, Travis Kelce.

Why It Matters

Irrespective of the drama associated with the Super Bowl, the main long-term catalyst for DKNG stock centers on legalization. Per Fortune, 38 states have legalized sports gambling. However, some notable exceptions exist, including California and Texas. If these states give the green light, the floodgates could potentially open for DraftKings.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


Related stories
2 weeks ago - The Dow Jones Industrial Average dropped Friday on hot inflation data that showed a significant rise in producer prices. Meanwhile, shares of Roku...
1 week ago - The Dow Jones industrial average and other major stock indexes surged in premarket trading Thursday, buoyed by a strong earnings report from chip maker Nvidia (NVDA). The artificial intelligence leader soared by double digits ahead of...
1 week ago - Dow Jones futures fell Tuesday, as Wall Street braced for today's minutes from the latest Federal Reserve policy meeting. Meanwhile, artificial intelligence leader Nvidia (NVDA) dropped ahead of its heavily anticipated earnings results,...
2 weeks ago - The Dow Jones Industrial Average added to its recent gains Thursday, in the wake of today's surprise jobless claims and retail sales. Meanwhile,...
Other stories
4 minutes ago - PayPal is down 80% from its all-time high and trades at a dirt-cheap valuation as it enters a "transition year."
14 minutes ago - Sports gambling companies like DraftKings and FanDuel are expanding way beyond football and basketball into online gambling and the lottery.
14 minutes ago - More than one million people died just in the U.S. as a result of the COVID-19 pandemic that broke out in 2020. But a scientific miracle – a vaccine released later that same year – saved countless lives. Last year Katalin Karikó and Drew...
14 minutes ago - Some members of oil cartel OPEC, led by Saudi Arabia, and allied producers like Russia are again deepening their voluntary crude supply cuts.
34 minutes ago - Super Micro Computer (NASDAQ: SMCI) was a big winner last month. The maker of storage and server systems that are highly valued for...
44 minutes ago - Fisker is stopping work on new electric vehicles until it partners with another automaker.The company announced its plans alongside its 2023 and Q4...