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Penn National, DraftKings Slide on Deutsche Bank Gaming Report

Penn National and DraftKings tumble as Deutsche Bank warns about 'too many agendas' in New York state.
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Penn National Gaming  (PENN) - Get Penn National Gaming Inc. Report and DraftKings  (DKNG) - Get DraftKings Inc. Report were sliding Monday following a Deutsche Bank report that said the future of online sports betting in New York state was "hanging by a thread."

DraftKings was down 5.9% to $59.88, while Penn National Gaming was sliding 7.68% to $98.39 on Monday.

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"This morning, comments from NY politicians, as reported by affiliate media, appear far more pessimistic than those of several weeks ago around the prospects of NY legalizing online sports betting in this session," analyst Carlo Santarelli said in a research note. 

While the matter likely will be settled by the end of the week, Santarelli added, "the early read, and our view, is that there are too many variant agendas and too little time to get this issue sorted out in this budget session."

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Santarelli said that "we think NY mobile legalization, the crown jewel of this legislative session, appears to be kicking the can for another time."

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In January, New York Gov. Andrew Cuomo reportedly expressed support for legalizing online sports betting.

If legislation is passed, New York would become the biggest state with mobile gambling by a significant margin, the betting-news website Action Network reported.

Online sports betting has surged during the COVID-19 pandemic shutdown.

Georgia and Florida are also expected to have updates this week pertaining to sports betting, the analyst said. 

"Over the weekend, Georgia removed the sports betting bill from the floor calendar, an ominous sign for bill proponents," Santarelli said, "which, while not killing the bill entirely, serves as a reminder of the limited importance of these bills for legislators in the broader scheme of budgets."

Meanwhile, the analyst said it has been quiet in Florida since commentary from Gov. Ron DeSantis around resolving some gaming-related issues in the coming weeks. 

"We remain firm in our view that sports betting in Florida will happen if the Seminole Tribe wants it to happen, and if so, we believe the Seminole Tribe will control it," Santarelli said.

Last week, DeSantis and Senate President Wilton Simpson told 20 top officials of Florida’s casinos, poker rooms, horse tracks and jai-alai facilities, that Florida legislators are “getting close” to a new gambling deal with the Seminole Tribe of Florida, according to the Miami Herald,