A new analyst call from Evercore ISI has the shares of sports betting company DraftKings (NASDAQ:DKNG) trading up 10% as of 3:30 p.m. EDT. The company also entered into an exclusive deal to expand its reach in the state of Illinois.
Evercore ISI analyst Kevin Rippey gives DraftKings a $60 price target with his outperform rating. That represents about 50% upside over the current price, even after today's pop.
DraftKings also entered an exclusive partnership today with Accel Entertainment (NYSE:ACEL). Accel has more than 2,300 video gaming machines in the state of Illinois. DraftKings recently entered the state with a retail sportsbook at the Casino Queen in East St. Louis.
The company also announced last week that it is partnering with the Chicago Cubs in the state. It will be opening a sportsbook inside the 106-year-old Wrigley Field, and will allow free online access in the adjacent Wrigleyville neighborhood.
The deal with Accel will promote DraftKings content and programming on all of its Illinois gaming machines. DraftKings' expanding reach in Illinois is an example of why analyst Rippey thinks there's plenty of upside for the shares.
The analyst believes more states will accelerate the legalization of online sports betting. He said that 10% of the U.S. population currently has access to legal sports gambling. But he believes that number will jump to 40% by the start of the 2022 NFL season. He predicts that this will drive market share due to the company's well-known brand and leading technology.
It's likely that DraftKings won't be the only online sports betting company that will prosper if 40% or more of the population gains legalized access.