What a DraftKings-ESPN Tie-Up Will Mean for Investors

DraftKings shares jumped more than 3% last Friday. Rumors about a potential partnership with Walt Disney's ESPN have been circulating since summer of 2021.

FanDuel has an edge in certain markets, including New York, where sports gambling became legal in January 2022. The state has a stiff 51% tax on online sports betting operators. FanDue's revenues in NewYork increased by 66% from June to September, from $39.6 million to $65.7 million. DraftKing's revenue increased 174%, from $16.4 million to $44.9 million in the same period. In September the nine operators made $70.2 million after the 51%. New Yorkers made in $73.1 million, and the state is projecting $615 million for the fiscal year from April 1, 2022 to April 1st 2023.

DraftKings is interested in a long-term deal with ESPN. Disney CEO Bob Chapek said in September that ESPN's younger fans want sports betting integrated into the network's programming and content. Chapek also said the company is working on an ESPN sports-betting app. DraftKings stock is down 51% year-to-date. A failed deal would hurt the stock, but it would help the share price.