As digital sports betting legalization continues its spread across the United States and online sportsbook activity gains popularity by leaps and bounds, an analyst telephone conversation with an NBA executive hints good things may be in store for DraftKings (NASDAQ:DKNG) and other sector companies. DraftKings just inked a partnership with the Drone Racing League, or DRL, last weekend, and now may be in line for an even bigger alliance.
Jed Kelly, an analyst at wealth management firm Oppenheimer & Co., recently reported on a phone conference with Scott Kaufman-Ross, senior vice president and head of fantasy & gaming at the NBA, Seeking Alpha reports. According to Kelly, the “NBA is choosing to form partnerships with multiple operators to help drive more innovation to the industry and improve fan experiences.”
The reason for the NBA’s initiative and the “live betting push” it is engaging in, according to Kelly, is an important trend revealed by the NBA’s research. The NBA says its data shows “consumers who bet sports are watching more games for a longer time, and consuming more non-game content,” meaning partnering with enterprises like DraftKings could help increase things like viewing time and ad views. The NBA is even considering a telecast with reduced video quality to increase bandwidth available for an accompanying high-speed betting feed, Kelly notes.
Online sports betting continues to gain ground, with Penn National Gaming (NASDAQ:PENN), bolstered by its stake in Barstool, breaking the $100 stock price mark for the first time ever this week. With the NBA apparently seeking multiple partnerships, the windfall in profits and stock market gains from that alliance could potentially benefit several of the big-name digital gambling companies simultaneously.