During this week, the Roundhill Sports Betting and iGaming exchange-traded fund has jumped 12% since Tuesday, which is the most ever for the ETF. DraftKings and Penn National Gaming are two of the top holders and have also seen increases this last week; DraftKings by 29% and Penn National by 11%.
This previous month has seen sports betting companies hit by investor fears around profit and potential sell-offs of software stocks. However, with the anticipation of higher spending, investors have been given a renewed incentive to buy shares.
Macquarie Bank Analyst Chad Beynon responded to the situation by explaining that this tournament is the catalyst for current and future stock gains. He continued: “March is historically the fifth-most important month of the year for sports betting and, absent the NFL months, it’s actually the most important. Sports betting seasonality really drops off after March Madness.”
Beynon believes the increase in attention given to sports betting platforms should motivate investors, the most important element for long-term gain is retaining a path of profitability.
“They’re losing so much money and revenue estimates keep going higher, but losses keep going higher as well. DraftKings, FanDuel, BetMGM and Caesars are all saying, ‘everything is according to plan and while we’re gonna lose a decent amount of money in 2022, 2023 is gonna be much better.’”
