Penn National Gaming (PENN) - Get Penn National Gaming, Inc. Report and other online gambling companies continued to climb Wednesday just as the college and professional football seasons are set to kick off.
Penn National shares on Wednesday rose 8% to $79.49 at last check. DraftKings (DKNG) - Get DraftKings Inc Class A Report advanced 5.4%, Golden Nugget Online Gaming (GNOG) - Get Golden Nugget Online Gaming, Inc. Class A Report was up 5.2%, Scientific Games (SGMS) - Get Scientific Games Corporation Report rose 3.2% and Caesars Entertainment (CZR) - Get Caesars Entertainment Inc Report climbed 3.3% at last check.
Needham analyst Bernie McTernan noted the underperformance for the sector over recent months and told Bloomberg that the NFL season quickly approaching is “a reason for investors to own shares given its potential to highlight the sports betting TAM,” referring to total addressable market.
The college football season is schedule to begin on Saturday in so-called "Week Zero." The National Football League season starts on September 9.
Separately, some of the ARK Invest exchange-traded funds run by fund manager Cathie Wood purchased over 1 million shares of DraftKings on Tuesday valued at about $60.6 million.
This was the same day that DraftKings and the micro-betting company Simplebet announced a multi-year agreement. A micro-bet is a wager on a specific in-game event, such as a field goal attempt.
Earlier this month, Golden Nugget Online Gaming agreed to be acquired by peer DraftKing in an all-stock deal valued at $1.56 billion.
The transaction will give DraftKings more than 5 million customers from Golden Nugget.
Gambling shows no signs of slowing down. U.S. gambling revenue hit $13.6 billion in the second quarter, a new industry record, according to the American Gaming Association.
Revenue from iGaming also increased, the association said, achieving a new quarterly revenue record of $901 million, up 15% from the first quarter of 2021, and smashing the previous quarterly revenue record from Q3 2019 by 22.5%.
The COVID-19 pandemic pushed online gaming into overdrive as brick-and-mortar casinos were forced to shutdown initially and reopen to reduced capacity.
A study by the University of Bristol that was published in May found that regular gamblers were more than six times more likely to gamble online during the lockdowns than they were prior to the pandemic.