Online sports betting specialist DraftKings Inc. (DKNG) declined by -1.62% on Friday to $49.25, a level near to its price before rising on a positive news from Canada.
The stock recently got a push in trading on November 27 by more than 5 percent to $52.75, which came on the heels of the news about the possible settlement of Canada’s sports betting. That was just a bill, but many investors believed that in the long term, DraftKings will take advantage of legalizing online betting in Canada.
In the Canadian Parliament, a bill to legalize sports betting was presented on Thursday, November 26. Acceptance of the bill meant that the Canadians will be able to place sports bets on single-event basis if the bill is accepted. Currently, only bets are permitted in the country on multiple sporting events: to win, players must correctly guess the result of all selected games. The equivalent of $384 million annually is spent by Canadians on such bets through authorized gambling networks. This sum will rise if other forms of sports betting are legalized.
Investors’ sentiment on this news to the growth of DraftKing was nothing else but emotional as there was no guarantee that the bill will be passed. It was also not confirmed whether the company will be granted permission to operate in Canada, but investors remain hopeful. They think DraftKings has ample resources to get the right to work in another country.
In general, since the beginning of the year, DraftKings shares have risen by nearly 360 percent. With new tax laws in various U.S. states, the company rapidly grew its geographical reach. The services of DraftKings are now available in 24 States, and the number of potential customers is growing rapidly. In the United States, the demand for gambling and online sports betting may hit $58 billion a year according to some analysts. In a brief period of time, DraftKings Inc. (DKNG) will possibly be able to promote its services north of the United States.