Fantasy sports operator DraftKings (DKNG 8.18%) has seen strong gains as the popularity of online sports betting rises quickly across America. Financial analysis firm Bernstein underscored that fact with its first-ever coverage of the company. Bernstein gave DraftKings a price target of $71 per share, more than 31% higher than its stock price at the start of trading today, along with an outperform rating.
The accompanying research note makes predictions about both the future of DraftKings specifically, and digital sports betting in the United States in general. The firm forecasts a $25 billion market by 2025 and a $30 billion market a decade in 2030, at which point it expects 85% of the country's population to have access to legal online sportsbooks.
Bernstein points to three high-population states, remarking "none of the top 3 markets (California, New York, and Florida) have been fully legalized" and predicts legalization there by 2022 or 2023 at the latest. Other companies also have their sights on these states. Casino company Caesars Entertainment (CZR) bought a stake in fantasy sports platform SuperDraft, citing the latter's presence in 35 states, including what might be dubbed the "big three," as one reason. Another casino operator, Bally's Corporation (BALY 9.22%), is buying fantasy sports company Monkey Knife Fight, which is taking aim at California, Florida, and Texas, to establish "a unique position in these states to run a profitable fantasy sports site, while readying ourselves for gambling."
DraftKings continues aggressively expanding in step with new state sports betting legalization measures. It just started operating in its 12th state, Virginia, with CEO Jason Robins remarking, "we hope to be the sportsbook of choice for Virginians who enjoy having skin in the game," Casino News Daily reports.