{"id":236858,"date":"2022-10-11T13:25:35","date_gmt":"2022-10-11T18:25:35","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=236858"},"modified":"2022-10-11T13:52:29","modified_gmt":"2022-10-11T18:52:29","slug":"draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/","title":{"rendered":"California’s Prop 27 Failure Could Be Positive for DraftKings, Says Analyst"},"content":{"rendered":"

DraftKings (NASDAQ: DKNG) stock slumped 13.9% on Monday, performing significantly worse than other gaming names, including sportsbook operators, amid rising concerns that Proposition 27 is heading for Election Day defeat in California.<\/p>\n

\"DraftKings
An image for Prop 26 & 27 in California. DraftKings could actually benefit from failure of Prop 27, says an analyst. (Image: YouTube)<\/figcaption><\/figure>\n

In a note to clients today, Oppenheimer analyst Jed Kelly says part of the reason for the Monday slide by DraftKings stock was a Wall Street Journal<\/em> article. The piece pointed out that operators supporting Prop 27 are slashing television advertising spending amid slack polling data. However, that\u2019s been known<\/a> for several weeks, prompting Kelly to say he was somewhat surprised by DraftKings\u2019 slide yesterday.<\/p>\n

\n

Prop 27 is supported by Bally Bet, Barstool Sportsbook, BetMGM, DraftKings, Fanatics, FanDuel, and WynnBET — companies that have given $169.2 million<\/a> to a campaign designed to garner support among Californians frustrated with the state\u2019s homeless problem. The competing Proposition 26 is backed by tribal casino groups.<\/p>\n<\/div>\n

Recent polling data suggest both measures are heading for defeat — an outlook with which Oppenheimer\u2019s Kelly concurs.<\/p>\n

DraftKings Could Turn California Lemons Into Lemonade<\/h2>\n

Kelly notes that defeat of Prop 27 removes a significant bearish overhang on DraftKings stock. That’s because it eliminates the need for the company to potentially raise capital to support spending in the largest state.<\/p>\n

That\u2019s critical on multiple levels, not the least of which is that this is an inopportune time for DraftKings to tap capital markets. The company\u2019s choices for raising cash likely boil down to selling corporate debt or issuing more shares, neither of which is appealing.<\/strong><\/p>\n

Investors are hoping Kelly is correct in assuming the gaming operator won\u2019t imminently raise cash. That’s because a bond issue would almost certainly be rated junk, thus carrying a high interest rate. Likewise, investors\u2019 tolerance for dilutive equity sales<\/a> is wearing thin.<\/p>\n

Additionally, it\u2019s possible that if Prop 27 were to pass, not only would tribes fight in court, but DraftKings and peers would engage in\u00a0 a New York-style promotional battle. They would be expected to\u00a0 cough up large amounts of cash to win customers. That’s at a time when Wall Street is demanding restrained spending and more visibility on profitability.<\/p>\n

Kelly\u2019s California Call<\/h2>\n

Oppenheimer\u2019s Kelly offers up a pragmatic solution for what will come of regulated sports wagering in California if both Prop 26 and Prop 27 fail on Election Day.<\/p>\n

The analyst sees sports betting in the state being pushed out another two or three years, and that the model to be adopted will be similar to states such as Connecticut and Michigan. Those states have heavy tribal casino footprints, but allow mobile sports wagering via tribal partnerships with operators such as DraftKings.<\/strong><\/p>\n

Kelly adds that two or three years out, DraftKings will be in a better financial position to enter California. That’s as the company turns profitable and generates more revenue in the states in which it currently operates.<\/p>\n","protected":false},"excerpt":{"rendered":"

DraftKings (NASDAQ: DKNG) stock slumped 13.9% on Monday, performing significantly worse than other gaming names, including sportsbook operators, amid rising concerns that Proposition 27 is heading for Election Day defeat in California. In a note to clients today, Oppenheimer analyst Jed Kelly says part of the reason for the Monday slide by DraftKings stock was […]<\/p>\n","protected":false},"author":46,"featured_media":236859,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,61,1074],"tags":[81905,81903,81901,80968],"acf":[],"yoast_head":"\nDraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst<\/title>\n<meta name=\"description\" content=\"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-10-11T18:25:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-10-11T18:52:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/\",\"name\":\"DraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg\",\"datePublished\":\"2022-10-11T18:25:35+00:00\",\"dateModified\":\"2022-10-11T18:52:29+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg\",\"width\":1280,\"height\":720,\"caption\":\"An image for Prop 26 & 27 in California. DraftKings could actually benefit from failure of Prop 27, says an analyst. (Image: YouTube)\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"News\",\"item\":\"https:\/\/www.casino.org\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Financial\",\"item\":\"https:\/\/www.casino.org\/news\/financial\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"California’s Prop 27 Failure Could Be Positive for DraftKings, Says Analyst\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.casino.org\/news\/#website\",\"url\":\"https:\/\/www.casino.org\/news\/\",\"name\":\"Casino.org\",\"description\":\"Latest Casino and Gaming News\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.casino.org\/news\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\",\"name\":\"Todd Shriber\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"caption\":\"Todd Shriber\"},\"description\":\"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.\",\"sameAs\":[\"https:\/\/muckrack.com\/todd-shriber\",\"https:\/\/www.linkedin.com\/in\/toddshriber\/\",\"https:\/\/x.com\/etfgodfather\"],\"url\":\"https:\/\/www.casino.org\/news\/author\/todd-shriber\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"DraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst","description":"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/","og_locale":"en_US","og_type":"article","og_title":"DraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst","og_description":"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.","og_url":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/","og_site_name":"Casino.org","article_publisher":"https:\/\/www.facebook.com\/Casino.OrgNews","article_published_time":"2022-10-11T18:25:35+00:00","article_modified_time":"2022-10-11T18:52:29+00:00","og_image":[{"width":1280,"height":720,"url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg","type":"image\/jpeg"}],"author":"Todd Shriber","twitter_card":"summary_large_image","twitter_creator":"@etfgodfather","twitter_site":"@Casino_Org","twitter_misc":{"Written by":"Todd Shriber","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/","url":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/","name":"DraftKings Stock Could Get A Lift If Prop 27 Fails, Says Analyst","isPartOf":{"@id":"https:\/\/www.casino.org\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage"},"image":{"@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage"},"thumbnailUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg","datePublished":"2022-10-11T18:25:35+00:00","dateModified":"2022-10-11T18:52:29+00:00","author":{"@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85"},"description":"DraftKings stock could get a surprise boost from the failure of Prop 27 in California, says analyst.","breadcrumb":{"@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#primaryimage","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/prop27.jpg","width":1280,"height":720,"caption":"An image for Prop 26 & 27 in California. DraftKings could actually benefit from failure of Prop 27, says an analyst. (Image: YouTube)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.casino.org\/news\/draftkings-stock-could-get-a-lift-if-prop-27-fails-says-analyst\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"News","item":"https:\/\/www.casino.org\/news\/"},{"@type":"ListItem","position":2,"name":"Financial","item":"https:\/\/www.casino.org\/news\/financial\/"},{"@type":"ListItem","position":3,"name":"California’s Prop 27 Failure Could Be Positive for DraftKings, Says Analyst"}]},{"@type":"WebSite","@id":"https:\/\/www.casino.org\/news\/#website","url":"https:\/\/www.casino.org\/news\/","name":"Casino.org","description":"Latest Casino and Gaming News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.casino.org\/news\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85","name":"Todd Shriber","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","caption":"Todd Shriber"},"description":"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.","sameAs":["https:\/\/muckrack.com\/todd-shriber","https:\/\/www.linkedin.com\/in\/toddshriber\/","https:\/\/x.com\/etfgodfather"],"url":"https:\/\/www.casino.org\/news\/author\/todd-shriber\/"}]}},"_links":{"self":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/236858"}],"collection":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/users\/46"}],"replies":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/comments?post=236858"}],"version-history":[{"count":0,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/236858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media\/236859"}],"wp:attachment":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media?parent=236858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/categories?post=236858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/tags?post=236858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}