DraftKings, Penn National Surge on Sports-Betting Approvals

DraftKings, Penn National and other gambling companies climb after votes in three states approve legal-sports-betting measures.
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DraftKings  (DKNG) - Get Report, Penn National Gaming  (PENN) - Get Report and other gambling companies on Wednesday were climbing after voters in Louisiana, South Dakota and Maryland approved legislation legalizing sports betting. 

Boston-based DraftKings was up 3.8% to $38.90, while Penn National, Wyomissing, Pa., was up 2.8% to $57.60.

Boyd Gaming  (BYD) - Get Report, MGM Resorts  (MGM) - Get Report and Caesars Entertainment  (CZR) - Get Report were also advancing.

“The people of Louisiana have spoken," Ryan Berni of Louisiana Wins, a coalition set up to get a sports-betting proposition passed, said in a statement. 

“Louisiana was missing out on tax revenue from not having legal sports wagering, and now we will be able to raise revenue to support our state’s many needs."

A study commissioned by Louisiana's Department of Economic Development estimated that Louisiana was missing out on as much as $330 million in taxable revenue.

Currently, 25 states allow casino gambling, while 18 states and Washington, D.C., allow sports betting. Ohio and Massachusetts are considering legislation to legalize sports betting.

Maryland voters approved, by a 2-1 margin, a measure to legalize sports wagering at licensed facilities, according to the Baltimore Sun. 

Gov. Larry Hogan and the General Assembly will now need to work out the details of which companies can apply for licenses, in which ways fans will be able to place bets and what percent the state would take in tax. 

Assuming the state would tax sports gambling revenue at 20%, as it does table games in the state's casinos, Maryland could reportedly bring in $18.2 million a year.

Maryland State Sen. Craig Zucker said the measure would bring in millions to the state to be put toward funding Maryland's public education. 

The coronavirus caused casinos to shut down, Zucker said, resulting in a $150 million loss to the Education Trust Fund.

Betting on sports in most states was illegal under federal law until the U.S. Supreme Court ruled in 2018 that the federal law was unconstitutional. That offered states the opportunity to authorize sports betting.