Although it was carried on across the United States every single day of the year for literally hundreds of years, sports betting was only legal in Nevada and Delaware. After years of efforts to change the rulings that kept it illegal, that prohibition came to an end in 2018, when the U.S. Supreme Court ruled in the favor of individual states on a case involving the constitutionality defined by a 1992 law, the Professional and Amateur Sports Protection Act, which prohibited states other than Nevada and Delaware from operating sports betting.
Since that time, numerous states have passed laws that allow both sportsbook gambling in casinos and online sports and betting. While those stocks leaped on the national and state legal changes, they have recently seen a major pullback. The analysts at Goldman Sachs say now is the time to buy shares in front of upcoming earnings reports:
With most of the stocks in our coverage at or above their pre-pandemic enterprise values, we continue to focus on the opportunities with longer-term idiosyncratic growth or benefits post-pandemic. Specifically, we are Buyers of the pullback in Online Sports Betting/iGaming following recent underperformance as we continue to see a combination of one of the best long-term growth stories across consumers coupled with accelerating trends in the next few quarters as easier comparisons are lapped and adoption continues to ramp with states opening. We also see structural opportunity in the regional market from older customers returning to the properties and some portion of younger customers being retained all while promotions likely remain subdued given consolidation and strategy changes from the largest players.
The analysts have three stocks rated Buy, all of which are leaders in the industry, and they are great long-term ideas for growth stock investors with a higher risk tolerance. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Shares of this industry leader have backed up nicely, offering a great entry level. DraftKings Inc. (NASDAQ: DKNG) operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.