Why Is DraftKings’ Stock Price Down Today?

A pessimistic Deutsche Bank report wasn’t enough to stop DraftKings from teaming up with a $4 billion American pastime.

Like many children of the ’90s, I went through a phase of wrestle-mania (pun intended) and now, decades later, I get to write about how World Wrestling Entertainment (NYSE: WWE) has just signed fantasy sports and betting company DraftKings (NYSE: DKNG) as its official gaming partner. 

And boy, does DraftKings need the win…

What’s up with DraftKings?

DraftKings fell yesterday following reports that the future of online sports betting in New York state was “hanging by a thread.”

The fourth-most populous state in the U.S. will soon be voting on whether to legalize mobile sports betting. If passed, New York would become the biggest state with mobile gambling by a significant margin, but there is an overall feeling from analysts that the bill will not be passed just yet given time constraints.

While it’s bad news for DraftKings, it’s not a deal-breaker just yet. DraftKings’ sportsbook is currently live in 12 states — more than any other operator — representing about 25% of the U.S. population. 

In the meantime though, DraftKings has an ace up its sleeve in its WWE partnership, giving them exclusive rights to the wrestling company’s media assets and brand placement at WWE pay-per-view events. WWE event fans and DraftKings customers will also be able to participate in various integrated, free-to-play contests, with the joint online free-gaming pools to debut at the upcoming WrestleMania event on April 10/11 in Tampa Bay.

This latest partnership follows last month’s deal with mixed martial arts promoter UFC, which was worth a reported $100 million. DraftKings is building a sports media empire that goes well beyond just betting, and we’re just seeing the beginning. 

DraftKings is the most recent stock to be added to the MyWallSt shortlist. If you want to read our analysts’ thoughts, MyWallSt subscribers can read more here or sign up for a free 7-day trial.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here