Please ensure Javascript is enabled for purposes of website accessibility

Why DraftKings Is Down 4% Today

By Rich Duprey - May 17, 2021 at 3:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The sportsbook hit a small speed bump in its expansion plans.

What happened

Shares of DraftKings (DKNG -7.35%) were down 4% in afternoon trading Monday after Florida Republicans delayed the launch of sports betting in the state until October. They also killed a deal with the Seminole Tribe for a broad expansion of online gambling.

So what

Gov. Ron DeSantis had worked out a deal with the Indian nation to authorize sports betting and even micro-betting, or bets on outcomes of events occurring within an event. It would have also allowed the state to negotiate again with the tribe in three years to authorize additional forms of online and mobile gaming.

Sports fans holding their heads

Image source: Getty Images.

Republican leadership in the state legislature said, "Even the mere possibility of this was unacceptable," according to the Tallahassee Democrat.

Critics of the deal had lobbied against it, saying the bill would, as one opponent put it, "turn every cellphone into a slot machine in Florida."

Now what

The Seminole Tribe of Florida has exclusive rights to certain kinds of gambling in the state, and has the right to assign licenses to sportsbooks; that remains unchanged by the development.

The legislature will vote on the revised measure this week and it still needs to be approved by federal Indian gambling regulators in the Interior Department.

DraftKings stock is down over 20% this month despite having beat Wall Street earnings estimates and raising its guidance for the full year. Valuation has been a main concern. The Florida negotiations only represent a delay to DraftKings' expansion plans in the state, not an end to them.

Rich Duprey 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DraftKings Inc. Stock Quote
DraftKings Inc.
$18.14 (-7.35%) $-1.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.