On Monday, ESPN struck a deal with DraftKings (NASDAQ: DKNG) and Caesars Entertainment (NASDAQ: CZR) sending DraftKings up 17.27% gains and Caesars Entertainment up 8% by midday.
The gains are not just limited to DraftKings and Caesars, however. MGM Resorts International (NASDAQ: MGM) has seen a 20% growth in the last 3 months and Penn National Inc. (NASDAQ: PENN) has seen a whopping 176% growth this YTD alone.
These incredibly strong financial returns from major players in the market are what made DraftKings Inc. IPO this year in the first place. In April, DraftKings filed their IPO at around $19 per share. Currently, they have hit their 52 week high of $55 per share and a market cap over $19 billion.
On Friday, DraftKings reported that week 1 of the NFL season contributed to the most signups in the companies history.
Caesars and DraftKings Show That Partnerships Are Key to Success
When ESPN announced their new deal with DraftKings and Caesars Entertainment, it came with much fanfare for DraftKings specifically who saw a 17% gain and an IPO less than nine months ago. Their stock is currently at its all-time high but the missing component of the deal is where Caesars fits in.
William Hill, the official betting partner of Caesars Entertainment, has all of the same rights as DraftKings. Caesars and DraftKings also opened a brand new state of the art ESPN facility in Las Vegas that was announced in August. ESPN Vice President of Business Development, Mike Morrison, announced the deal in a press release stating:
“We began growing the experience through content, followed by odds utilizing William Hill’s sports betting data and a new state-of-the-art studio facility in Las Vegas through our deal with Caesars, and now with the addition of DraftKings, we are bringing together the sports media leader with two of the top brands and best products in the segment.”
DraftKings’ market cap has grown at a rate that few thought possible at one time. It is over $19 billion while Caesars offers around $9 billion. These are massive numbers being put up by DraftKings Inc.
Pushing DraftKings over the hump is a list of high profile people that have been in the company from the beginning. They feature star-studded investors like billionaire George Soros, New England Patriots Owner Robert Kraft, and Dallas Cowboys Owner Jerry Jones. That combined with a small stake that Disney owns, expect DraftKings to continue to bring in high profile partnerships.
Disney is the parent company to ESPN, which helped the stock increase 17% when DraftKings and ESPN announced a partnership.
Landcadia Holdings II Goes Public and Merges With Golden Nugget
The news does not stop at DraftKings, Caesars, and Penn National, however. Landcadia Holdings II (NASDAQ: LCA), owned by Tilman Fertitta recently merged with Golden Nugget Online Gaming (NASDAQ: GNOG).
Golden Nugget has been taken public and working towards ramping up their sportsbook product. Only legal in New Jersey and Nevada so far, Golden Nugget has plans to expand their borders. Per their press release, Golden Nugget discusses expansion plans saying:
“GNOG has obtained market access, subject to regulatory approval, to Pennsylvania and Michigan and anticipates launching its online casino brand in each of those new markets in early 2021.”
Golden Nugget’s value is going to be with their online sportsbook and casino if they are able to get legislation. They currently only have 5 casino locations in the US so the online sportsbook and casino will be able to gain reach that their casino cannot compete with.
If Golden Nugget is able to launch a sportsbook and online casino in Pennsylvania and Michigan in early 2021 as they predict, Landcadia Holdings II could make some serious noise in the market next year. With a market cap of just $704 million, some experts predict it could double in value next year.
Now that we know how state legislation will directly increase the market capitalization of these companies, casino news is now more important than ever.