DraftKings (NASDAQ:DKNG) stock is looking to close in the green Wednesday as the sportsbook company inches closer to a deal with Barstool Sports. Indeed, it appears the media company is in advanced talks on a broad sports betting contract with DraftKings, per several anonymous sources.
The deal would make Barstool a DraftKings marketer, promoting its sports odds and earning referral fees to its sportsbook. However, the opposite likely wouldn’t apply as Barstool wouldn’t attach its brand to a sportsbook or betting platform.
Nothing is in ink yet, but current discussions have apparently pointed to a multiyear deal that would pay Barstool somewhere in the low eight figures a year. Barstool is currently unable to make a betting deal until after this year’s Super Bowl, a stipulation stemming from its recent detachment from Penn Entertainment (NASDAQ:PENN).
If you recall, Penn sold Barstool back to founder Dave Portnoy for $1 less than a year ago after purchasing the entire company for a total of $551 million with plans to use Barstool’s name as the basis for a potential sportsbook and betting app. Unfortunately, nothing quite manifested from the Barstool acquisition, leading Penn to offload it for $1 to Portnoy in order to partner with ESPN on a new sportsbook (ESPN Bet).
As part of the terms of the sale, Barstool is restricted from reentering the gambling field until the end of the current NFL season. In December, Barstool’s former Chief Executive, Erika Ayers Badan, hinted that a return to the sports betting world would likely come in 2024.
DKNG Stock Continues to Climb in 2024
Today’s uptick only adds to the success of DKNG stock. Indeed, the sportsbook is up nearly 15% in just the first month of the new year, adding to its more than 160% gains in 2023.
Reasonably so, as DKNG is one of the titans of U.S. sports betting, owning about 34% of the market, behind just FanDuel, with 39%. In online gambling, more generally, DraftKings and FanDuel are, by revenue, neck and neck with 31% and 30%, respectively.
Still, investors are eagerly awaiting the company’s fourth quarter and full-year earnings report, due next month.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
