The 2021-2022 NFL and NCAA football seasons kick off in the coming days, with college football slated to start this Saturday in what has come to be known as "week zero." Week one of the National Football League season will then begin on Thursday, September 9.
PlayUSA estimates $20 billion in bets will be placed in the upcoming football season, split between $12 billion for NFL games and $8 billion for NCAA football games. That would nearly triple the $7.5 billion in football bets made in the 2020-2021 season. The industry group added that sports betting could generate more than $1.5 billion in revenue in the upcoming football season.
Keeping that in mind, the next three sports betting stocks are likely to be some of the standout winners this fall as we head into football season.
1. DraftKings
Market Capitalization : $23.9 billion
Performance to date: +27.3%
DraftKings (NASDAQ:), widely regarded as the leader in the online sports betting industry, is expected to be one of the main beneficiaries of the upcoming NFL season.
The Boston, Massachusetts-based sportsbook operator joined FanDuel and Caesars Entertainment (NASDAQ:) earlier this year to become an official sports betting partner of the National Football League.
DraftKings, which last month agreed to acquire Golden Nugget Online Gaming for $1.56 billion, also recently announced a multi-year deal with NFL data provider Genius Sports (NYSE:), contributing ?a flurry of movements to create new offerings and stimulate growth.
Shares of the Boston, Massachusetts-based sportsbook operator – which went public through a Special Purpose Acquisition Company (SPAC) in April 2020 – is up 27.3% since the start of the year, compared to the profit of 20.4%.
DKNG shares ended Tuesday at $59.29, about 20% below the all-time high of $74.32 reached in late March. At its current level, DraftKings is valued at $23.9 billion, making it the most valuable sports betting company.
DraftKings reported a smaller-than-expected loss and strong growth when it announced its second quarter results in early August, as Americans flocked to the sports betting platform after more states legalized online sports gambling.
Monthly unique payers (MUPs) – an important statistic – increased 281% to 1.1 million, while average revenue per MUP increased 26% from a year earlier to $80.
]
The online gambling specialist made it clear that he doesn't expect a slowdown in the coming months, raising his full-year revenue target to a range of $1.21 billion to $1.29 billion, up from from the previous forecast of $1.05 billion to -$1.15 billion.
2. MGM Resorts
Market Cap: $20.5 Billion
Performance to date: +35.2%
Any discussion of the upcoming football season and related sports betting stocks would be incomplete without MGM Resorts International (NYSE:), the largest casino and hotel operator on the Las Vegas Strip.
The Paradise, Nevada-based betting company, which owns about a dozen properties, including the Bellagio, Mandalay Bay and MGM Grand, has been busy taking steps to bolster its online sports betting offering through the BetMGM app to be launched in several states in the past year.
In an encouraging development, BetMGM was approved last month as an official sportsbook operator with the NFL, joining other online sports betting companies such as DraftKings, FanDuel and Caesars.
MGM also recently signed notable partnerships with the NFL's Detroit Lions and Las Vegas Raiders to become their official sports betting partner for the upcoming season.
MGM shares – which fell 5% in 2020 amid the negative impact of the COVID pandemic on its core businesses – recovered this year, rising 35% in 2021. MGM stock closed at $42.62 yesterday, ahead of the recent 13-year peak of $45.32 reached in late June, yielding a valuation of $20.5 billion.
The company's second quarter financial results, released in early August, pointed to bright days for burgeoning sports betting. BetMGM's jumped to $45.9 million, an increase of a whopping 780% from revenue of $5.2 million in the same period a year ago.
3. Penn National Gaming
Market cap: $12.7 billion
Performance to date: -6.1%
With the college and professional football season about to kick off, Penn National Gaming (NASDAQ:) — which operates 43 casinos and racetracks in 20 states across the country — is well positioned to take advantage of the booming sports betting craze.
The company made headlines last year when it teamed up with Barstool Sports, the popular sports media empire run by high-profile founder Dave Portnoy, to launch its online sports betting app in several states.
Penn also recently announced that it has acquired Toronto, Canada-based sports betting company Score Media and Gaming, better known as theScore, for $2 billion, further bolstering its sports betting product portfolio. According to a joint press release from the two companies, the deal will create "North America's leading digital sports content, gaming and technology company."
PENN stock closed yesterday at $81.10, about 43% below the all-time high of $142.00 reached in mid-March. At current levels, the Wyomissing, Pennsylvania-based company has a market cap of $12.7 billion.
After shares rose 238% in 2020, Penn stocks fell about 6% in 2021 as investor sentiment cooled towards high-growth companies rallying during the COVID-19 pandemic. Despite the losses thus far, Penn remains one of the best names to own thanks to his emerging status as one of the leading players in the burgeoning online sports betting market.
Penn exceeded expectations for his earnings and earnings in early August, benefiting from the expansion of legal gambling and online sports betting in a growing number of US states.
