DraftKings Stock Falls on Weak New York Betting Data

Key Stocks Decline on Wagering Results

DraftKings (NASDAQ:DKNG) stock fell 7% and Flutter Entertainment (NYSE:FLUT) shares dropped 2% after the release of weaker-than-expected sports wagering data from New York state.

Market Overview: New York Data Disappoints

For the week ended January 25, New York's gross gaming revenue (GGR) declined 31% year-over-year, while the total amount wagered, known as the handle, increased by just 2% YoY. This led to what JPMorgan analyst Daniel Politzer described as a "very unfavorable" 4.7% hold rate. The report marks the fourth consecutive week of low or negative handle growth in the state.

Impact on the Betting Market

The disappointing figures have raised investor concerns about growth, particularly during the high-activity NFL playoff season. For the first quarter to date, GGR is tracking 13% higher YoY, but the handle is tracking 3% lower YoY. This trend suggests potential challenges for sustained growth momentum in the U.S. sports betting industry.

Summary and Outlook

The market's reaction highlights its sensitivity to key performance metrics from major states like New York. Investors will be closely watching subsequent data releases to determine if this slowdown is a temporary issue or a signal of broader market saturation. The performance of betting stocks remains closely tied to these state-level revenue and handle reports.

FAQ

Q: Why did DraftKings stock fall?
A: The stock fell after New York state reported a 31% YoY decline in gross gaming revenue and only a 2% increase in handle for the week ended January 25, raising concerns about market growth.

Q: What is a "handle" in sports betting?
A: The handle refers to the total amount of money wagered by all bettors over a specific period.

Source: Investing.com