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DraftKings Stock: The Key Catalyst In Sports Betting

DraftKings stock has been in a funk lately. However, the growth opportunities in sports betting might justify an investment at current levels — provided that one key catalyst materializes.

DraftKings, a company that offers daily fantasy sports contests, has seen rapid growth in recent years. Many experts believe that this trend will continue in the future as states such as Ohio move to legalize sports betting.

Figure 1: Online sports betting operator DraftKings.

Figure 1: Online sports betting operator DraftKings.

With people in previously outlawed areas now able to bet on sports legally, the company could see a surge in popularity. This could mean big profits for the company and could potentially boost the stock price as well.

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A growing pie

There is no doubt that the legalization of sports betting should be a huge boon to the industry. There are currently billions of dollars being wagered on sports games each year, and this number is only going to increase with the nationwide legalization of sports betting. This is good news for DraftKings stock (DKNG), of course, as it should give the company “a bigger pie” and benefit a player that is already a leader in the industry.

It's not just the increase in users and potential for increased profits that might drive the stock prices higher, however. There is also the potential for increased market share. As more and more states legalize sports betting, DraftKings will be in a better position to corner one of the most prized demographics in sports: young men.

One reason for DraftKings' success is that their contests are very easy to play. One can enter with as little as $2, and there are no long-term commitments. This makes it easy for people to get started, and it also allows people to play for smaller stakes if they're not comfortable betting large amounts of money.

Another reason for DraftKings' success is that they offer a wide variety of contests. This allows people to find what appeals to them, and it also helps to keep things interesting.

Is DKNG a good long-term bet?

DraftKings has clearly established itself as a leader in the rapidly growing world of sports betting, but does this success make them a viable long-term investment?

There are several reasons why DraftKings stock could be a viable long-term investment. First, the company is the leader in an industry that is seeing rapid growth, and there is no sign that this trend will slow down anytime soon.

In addition, the company has very strong brand identity, and they are well-regarded by their users. Lastly, DraftKings is in a favorable position relative to its competitors. The company has large market share and seems to be doing a better job than most of its peers at attracting new users.

In summary

DraftKings has quite a bit going for it and, so far, they have proven to be successful. Better yet, the growth opportunities ahead seem appealing. DraftKings stock currently has a market capitalization of $12.5 billion, which could prove low in the face of a potential growth ramp up in the sports betting space.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)