Stocks in Draftkings Drop Amid NY Sports Betting Concerns

The news may not be good for those sports betting operators looking to reach New York State's population of nearly 20 million remotely. Here's why Draftkings stock plummeted Monday.

• Shares of DraftKings tumbled 8.5% on Monday after New York politicians sounded much more pessimistic about the prospects of online sports betting passing in the state, Deutsche Bank (NYSE:DB) analyst Carlo Santarelli told investors in a research note.
• The New York State budget will be voted beginning Wednesday with no sign that legislators and Governor Andrew Cuomo are any closer to approving mobile wagering this year.
• “The bottom line is we need to negotiate with the governor,” said Sen. Joseph Addabbo. “We need to see what would be in the budget and the hours are diminishing because in order to have something to see on Wednesday, they have to go print tomorrow. You can’t buy a new car without seeing the color or the make.”
• Addabbo says his optimism has dropped from 80/20 to 50/50.
• Though Cuomo signed legislation that allowed for casinos to offer retail sportsbooks in desigated Upstate casinos, these establishments are out-of-reach of most major metropolitan centers, including New York City.
• Cuomo had previously stated that the state constitution would need to be amended to allow for mobile betting but suddenly did an about face back in January.
• Draftkings and other gaming companies may be shut out regardless and the NY Governor has hinted at adapting the so-called "Rhode Island Sports Betting Model", one that limits competitors.
• Neighboring New Jersey reported a sports betting handle of $743 million in February, down from $958.7 million in January.
• Cuomo has been embroiled in a scandal whereby a number of women have stepped forward accusing him of inappropriate behaviour.
• The New York Governor has mostly denied the allegations.
• BetOnline has made Cuomo a favorite not to step down from office.

- Gilbert Horowitz, Gambling911.com