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DraftKings, Penn National Rise as Legal Sports Betting Gets Closer in New York, Michigan

By Rhian Hunt – Updated Oct 14, 2020 at 10:49AM

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An analyst believes New York will be the first major state to legalize.

Online sports betting company DraftKings (DKNG 1.44%) and Barstool Sports owner Penn National Gaming (PENN -1.35%) rose Wednesday morning as Michigan moved closer to finalizing its new digital sportsbook regulations. Additionally, an analyst at investment bank Oppenheimer Holdings sees a strong possibility of New York state legalizing online sports gambling in 2021.

Oppenheimer's Jed Kelly said in today's research note that New York is likely to be the first among the so-called "big four" (California, Florida, New York, and Texas) to welcome internet sportsbooks. "Emerging budget deficits could be a catalyst for Cuomo to legalize," he said, according to Seeking Alpha.

A football, baseball, and baseball glove on a keyboard, with a $100 bill.

Image source: Getty Images.

Oppenheimer's analysis also points out physical sports betting is already legal in the Empire State, making online legalization a logical follow-up. The investment bank anticipates a 2021 rollout for a legal digital sportsbook there, possibly by March.

According to The Daily News, online sports betting might start even faster in Michigan, with a fourth-quarter 2020 ruling still possible. Online sports betting is already legal in Michigan, but lawmakers continue to hash out details of licensing approximately 10 months after permitted internet sports gambling was signed into law, according to CBS Sports.

Internet sportsbooks will have to operate through a partnership with a casino in the state. Barstool already has a foot in the door, and DraftKings is expected to follow suit, according to The Daily News.

DraftKings already saw its stock climb on Monday after several major Wall Street analysts gave its future prospects a bullish thumbs-up.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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