What happened

Shares of DraftKings (DKNG -3.68%) climbed 9% on Thursday after voters in three more states approved measures to legalize sports betting.  

So what 

Maryland, South Dakota, and Louisiana will soon allow bets to be placed on sporting events. They'll join 21 other states that already allow such wagers. As a leading daily fantasy sports contest and sports betting platform, DraftKings -- and its investors -- stand to profit handsomely from these developments.

A person points to an upwardly sloping line.

DraftKings' stock surged after more states legalized sports betting. Image source: Getty Images.

Now what

The pace of legalization appears set to accelerate in the coming year, as more states turn to sports betting to help shore up tax revenue bases depleted during the COVID-19 crisis. In turn, the online sports betting and gambling market could eventually generate $58 billion in annual revenue in the U.S. alone, according to some analysts. 

DraftKings has moved aggressively to make the most of this tantalizing growth opportunity. The hard-charging company has struck deals with ESPN and multiple sports teams in recent months -- all of which are designed to keep its brand top of mind among bettors. DraftKings is also flush with cash after its recent share offerings, which should give it the capital it needs to continue heavy investments in its growth initiatives.