How DraftKings and Flutter stocks are reacting to the news.
Just about a year ago, Vermont legalized sports betting in the state, but now some state lawmakers are looking to end it.
Lawmakers in Vermont recently introduced a bill to repeal sports betting and lottery wagering in the state. The bill (H. 133), introduced by Rep. Thomas Stevens and cosponsored by Reps. Troy Headrick and Michael Mrowicki, has not been voted on and was referred to the Committee on Government Operations and Military Affairs.
So, nothing is imminent, and it may not have the votes to move forward, but it is significant as no other states that have legalized sports betting have moved to repeal it thus far.
However, according to the local news outlet VTDigger, sports betting is expected to bring in less revenue than previously anticipated. State officials were projecting $7 million in revenue from sports betting this fiscal year, which ends in June, but they have lowered that to about $6.1 million. Officials say that it is because residents are winning an unusually high amount of their bets, according to VTDigger.
Headrick, in an interview with Play USA, said sports betting “disproportionately harms low-income and working families who are forced into desperate financial decisions.”
DraftKings and FanDuel parent stocks fall
Vermont has licensed three sports betting companies, DraftKings (NASDAQ:DKNG), FanDuel, which is owned by Flutter Entertainment (NYSE:FLUT), and Fanatics.
DraftKings and Flutter stocks were both down on Wednesday. DraftKings stock was off about 3% to just under $50 per share while Flutter dropped roughly 1% to around $291 per share.
It is not entirely clear if this news was impacting the stocks on Wednesday, but some investors may be concerned that this could influence other states, including those still on the fence about sports betting that haven’t legalized it yet. On the other hand, while the revenue projections may fall short, it may be hard for the state to cut off a revenue source at a time when potentially massive federal cuts may be impacting states.
Analysts are generally bullish on DraftKings stock, as the company beat earnings estimates for its fiscal fourth quarter and raised its 2025 guidance. The stock got a slew of price target upgrades post-earnings and has a median price target of $60 per share. That’s about 20% higher than the current price.
Flutter doesn’t report earnings until March 4, but it has a median price target of $316 per share, which would be an 8% increase over the current stock price.
