Online sports betting operator DraftKings (DKNG) announced on Tuesday it has bought sports betting video broadcast company Vegas Sports Information Network. DraftKings stock rose.
VSiN is a multiplatform broadcast and content company delivering sports betting news, analysis and data. It launched in 2017.
Based in Las Vegas, VSiN produces up to 18 hours of content each day. In addition to its 24/7 stream, VSiN’s original content is accessible through multiple video and audio channels including Comcast (CMCSA) Xfinity, Sling TV, FuboTV (FUBO) and MSG Networks (MSGN).
The acquisition will enable DraftKings, which is live in 14 states, to further build out its content capabilities and augment VSiN’s ability to broaden its audience alongside the expansion of legal sports betting in the U.S., the companies said in a joint press release.
“VSiN creates authentic and credible content that resonates with sports bettors at every level, whether they’re experienced or new to sports betting,” said DraftKings CEO Jason Robins in a statement.
VSiN’s current talent roster includes legendary sports broadcaster Brent Musburger and former NFL executive Michael Lombardi.
In a note to clients, Jefferies analyst David Katz says the purchase “does not meaningfully alter the trajectory toward profitability near term but positions DKNG for greater earnings power longer term.”
VSiN expands DKNG’s customer acquisition channel and could achieve greater customer acquisition cost efficiencies in the future, Katz noted.
DraftKings has existing broadcasting partnerships with Disney’s (DIS) ESPN and Dish Networks (DISH). It is also an official partner to the NBA, MLB, NFL, NASCAR, UFC and PGA Tour. In addition, on March 29 DraftKings announced an exclusive license agreement with the WWE.
Meanwhile, MGM Resorts’ (MGM) BetMGM announced Tuesday it will integrate content across Audacy’s broadcast sports radio stations and digital platform.
Audacy owns and operates 39 all-sports stations across the U.S. It also serves as the flagship home of 41 professional teams and over 50 Division 1 collegiate programs, including the New York Yankees, Dallas Cowboys, Golden State Warriors and University of Michigan, among others.
N.Y. Weighs On DraftKings Stock
Shares rose 4.5% to 60.79 on the stock market today, trying to regain its 50-day line. DraftKings stock has posted some big gains from the 50-day line in February and March, and hit a 52-week high of 74.38 intraday on March 22, according to MarketSmith chart analysis. But those gains have evaporated, triggering some roundtrip sell signals.
On Monday, DraftKings stock fell 8.5% on reports that New York Gov. Andrew Cuomo and other lawmakers are at a stalemate over who would operate the system
New York appeared to be on the verge of approving mobile sports betting. Now the clock is running out to include legislation in the next budget. The deadline is April 1.
Revenue Sharing At Issue
On Monday, a Deutsche Bank report currently listed New York under the category of states unlikely to legalize. Analyst Carlos Santarelli said in the note to clients that while Cuomo favors mobile betting through the state lottery, some lawmakers “want a multiple skin model in the hands of commercial operators.”
If Cuomo gets his way, companies like DraftKings and Penn, which operates Barstool mobile sports app, would have no role. Santarelli added that if outside operators are not included in the current legislation, lawmakers would have until June 10 to pass stand-alone legislation.
The stakes are high. According to research by industry tracker PlayNY, an open market could draw $37 billion in bets, $2.5 billion in operator revenue and more than $300 million in tax revenue over the first four years after launch. A closed market could draw $7.5 billion in bets, $750 million in revenue but $375 million in revenue for the state.
“The bottom line is we believe an open market will offer broader benefits for the state and its residents,” said PlayNY analyst Dustin Gouker in a statement. “But a closed market should produce more revenue for the state, and that is tempting for policymakers.”
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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