The start of football season and increasing acceptance of online sports betting has all eyes on gambling stocks. Shares of DraftKings Inc (NASDAQ:DKNG), FanDuel owner Flutter Entertainment PLC (LON:FLTRF), and Barstool Sports backer Penn Entertainment (NASDAQ:PENN) are all up this month after the start of NFL season.
The gaming association said more than half of American adults can place those bets in their home state, which is 18 million more than this time last year. Some 23 million people will place a bet online this season, up 18% from last year. Roth Capital recently raised DraftKings to buy, seeing a bounce from NFL season, while JPMorgan has an overweight rating on MGM Resorts International (NYSE:MGM), which through its BetMGM recently launched the first stadium-based sportsbook at the home of the Arizona Cardinals.
JPMorgan did cut its price target on MGM shares recently to $47 from $49. That still implies 30% growth from its current trading price of $35.90. The appetite for gambling is there despite inflation that has cut into household budgets. But gaming stocks have only recently begun to show positive momentum.
Flutter shares, down 20% year-to-date, are up 3% this week. DraftKings shares, down 35% this year, are up 1.3% this week, while Penn Entertainment, which has about a one-third stake in BarStool Sports with plans to take 100%, is down 37% this year but 0.8% for the week. MGM is down 20% this year but up 2.4% this week.