Sports Betting Stocks Slide During A Rough November

Dave Bonderoff

Last updated: December 13, 2021 8:22 AM EST • 4 min read

Sports Betting is on the upswing, but the shares of these stocks have taken a tumbling.

The US legal sports betting industry is on fire. But you wouldn't know that from looking at how publicly traded sports betting providers' stock have been performing as of late. Stocks for some of the major providers operating in the robust. But the competitive US scene has seen double-digit losses the last month or so leaving some analysts scratching their heads, wondering just when the stocks-slide will stop.

As of the end of November, 30 states plus Washington D.C. have launched their own legal sports betting platforms. Chasing market share in those jurisdictions has affected some of the big names in the industry. However, not in the way that most would have thought. While individual states are reporting record handles and revenues, stocks from some of their biggest providers have taken a hit during what is the busiest and most lucrative time for their businesses.

A Peek at DraftKings Through November

DraftKings is truly one of the dominant brands in the US legal sports betting scene. The company had a tough October and recently reported unforeseen losses and a missed forecast for the third quarter.

Shares of DraftKings dropped an eye-opening 26.4% in November and has been identified as a stock to watch. It has slid over 50% from its 2021 peak. Year-to-date, DraftKings stock is down 32.68% but could be on the uptick with impending moves into New York state and Canada on the horizon.

Penn National Struggling

Penn National is another top-tier US legal sports betting stock that has had a rough November. The company's stock slid 28.9% last month alone, thanks in large part to a Nov. 4 report that saw the company drastically miss its earnings forecast.

That same report revealed a $2.69 billion loss in the company's valuation, the biggest single drop they've experienced in its history of being a publicly-traded company. Overall, Penn National's stock has slid 44.5% in 2021.

Penn National's bad news could be extended with word that they missed out on the licensing process in New York. Dave Portnoy, head of one of Penn National's signature brands in Barstool Sports has also recently been embroiled in some controversy about his treatment of women.

Caesars

Caesars had a bad November but has generally been one of the bright spots of the legal sports betting scene. The company's stock dropped 17.9% in November but year-to-date, Caesars' shares are up 13.9%.

Caesars has been pushing all of the right buttons with regard to their expansion within the US. Their profile, thanks to naming rights of the Louisiana Superdome, their winning of a coveted spot in the New York mobile betting scene, and their sponsorship spree, which includes the Fiesta Bowl and a host of iconic pro and college sports teams as of late shows that the company is on the right path, despite the November slump.

Wynn Resorts

Wynn Resorts is another major sports betting provider that endured a stock slide in November. But it has not been as drastic as the others. Wynn's slump is a tad more justifiable than the others.

A company that relies heavily on in-person wagering, Wynn is about to be hit hard again by the persistence of COVID-19. Wynn's stock has gotten caught up in the overall spook that the Omicron variant brought to global markets.

Wynn's stock slipped 9.9% in November alone and could slide further if COVID isn't dealt with. In 2021, Wynn stock is down a troubling 31.29%.

MGM

MGM is one of the biggest gambling providers in the world. And yet, they have not been able to escape the sports betting stock slump that we have seen almost across the board.

November was tough on BetMGM too, dropping 16.56% during the one month alone. For the year, MGM Resorts stock has fallen 23.6%.

Ramifications

What has had all the looks of a modern-day gold rush has quickly been given a bit of reality when talking about the US legal sports betting industry. Customer acquisition costs, the race to gain more properties and market share, and now the threat of another COVID variant is threatening the legal sports betting industry across the country.

The good news is that the industry has seen this movie before and came out of it stronger. If COVID lockdowns and the pause of global sports leagues couldn’t deal a body blow to sports betting providers, likely nothing will.

November’s stock struggles combined with the eye-opening year-to-date drop in share value for sports betting providers almost across the board should act as a cautionary tale that the sports betting industry isn’t as bullet-proof as once thought. That said, there aren’t many that will be betting against sports betting providers as the industry in the US grows and becomes more mainstream.

Written By:
Dave Bonderoff

Dave Bonderoff and betting go hand-in-hand. Both are characterized by "odds". Dave fancies himself as one of the most dedicated sports and pop-culture junkies around, to the chagrin of his family and friends. Following sports for 50 years and writing about it for 20, Dave hasn't found a sport yet that can't contribute to 2-3 straight hours of couch time. That search remains ongoing. As a good old Canadian boy, hockey is in Dave’s heart, as is curling sadly. But evolution is a real thing and that’s why football, baseball, and just about every sport on the planet has become a passion. Dave isn’t afraid to kill some time obsessing over politics or the far-too-frequent awards shows the consume the airwaves.