DraftKings And The Growing Shift To Sports Betting

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Since last October, Tennessee, Michigan, and Virginia launched their first online sports book. Meanwhile, Louisiana, Maryland, and South Dakota all legalized sports betting.

To understand the potential of stocks like DraftKings (DKNG) is to read the writing is on the wall and realize it's a matter of when and not if in the rest of the states.

Amid these legislative tailwinds, is DraftKing's potential as a growth play baked in already? Developments in the last week, plus a closer look at some technical and historical data, say not so fast.

As Ohio prepares its bill, DraftKings was making two under-the-radar moves. First, they inked a deal with Worldwide Wrestling Entertainment (WWE), becoming an official partner subject to regulatory jurisdictions.

DraftKings' immensely popular free-to-play pools product will integrate with WrestleMania, on April 10 and 11. A day later, they acquired Vegas Sports Information Network, Inc. (VSiN), a multi-platform content company that offers betting news and analysis.

Does wrestling and a niche news network really move the needle? Absolutely not. But consider DraftKings also has broadcasting partnerships with Walt Disney's (DIS) ESPN and Dish Network (DISH). It is also an official partner to the NBA, MLB, NFL, NASCAR, UFC, and PGA Tour.

They are slowly but surely nudging and positioning themselves into every sporting landscape out there where money changes hands. And regarding VSiN, DraftKings can now tap into the Vegas gambling infrastructure, a critical element in any sports betting landscape.

A month ago this article may not have been written, because DKNG was nabbing record highs left and right, and its 14-day Relative Strength Index (RSI) crept up into 70 and firmly in overbought territory.

But since a March 22 peak of $74.38, the stock has taken a roughly 18% haircut and offered up an attractive entry point for speculators, with its RSI last seen at a much more palatable 48.

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Adam Reynolds 4 weeks ago Member's comment

Nice! 🚀🚀🚀