Super Bowl LIX was not all that exciting unless you were a fan of the champion Philadelphia Eagles or you won money betting on it – which a lot of people did.
According to experts, some $1.5 billion was bet on the Super Bowl, which was above pre-game estimates of about $1.4 billion. It was also a record, topping the $1.25 billion wagered on the Super Bowl in 2024.
The numbers keep rising as sports betting in the U.S. becomes more and more popular. Currently, 38 states allow some form of legalized sports betting, with Missouri joining the ranks in 2024. According to a survey by the American Gaming Association, 75% of Americans support legal sports wagering in their state, while 90% view sports betting as an acceptable form of entertainment.
While bettors generally had a good day Sunday, most sports betting stocks did not. Some moved higher on Monday, particularly DraftKings (NASDAQ:DKNG), while others were down. Here’s why.
Unfavorable outcome for sports books
A roughly 20% increase in overall wagers would seem to be a positive development for sports betting stocks, and it was to an extent.
But the outcome was not all that favorable for the sports books. The Eagles won the game 40-22 as 1.5-point underdogs against the two-time defending champion Chiefs.
However, most of the money was bet on the underdog Eagles to win outright on the moneyline, which they did, easily. Also, most of the bets were on the total to go over the 48.5 that most sportsbook set. That also happened, as the Chiefs scored two late garbage touchdowns to push the score to 40-22, past the total.
So, on those counts, the sports books, in general, lost. The best outcome for the sports books would have been a Chiefs win and the under to hit.
That said, the sheer volume of bets and the exposure the industry got on the biggest betting day of the year offset the less than favorable outcome for sports books.
Also, sports books did well on prop bets, particularly on those involving Eagles running back Saquon Barkley. Most expected him to get a touchdown or hit yardage totals, but he did not. Sports books also scored on Chiefs tight end Travis Kelce, who many picked to hit on receiving yard lines, which he did not.
Which stocks did the best?
The U.S. online sports betting market is dominated by two major players, DraftKings and Flutter Entertainment (NYSE:FLUT), which owns FanDuel. The two control about 80% of the market.
DraftKings stock was rising on Monday, up about 1.4% to nearly $43 per share as of Monday afternoon. While the Super Bowl outcome may not have been favorable, the stock got a significant boost from Wall Street analyst Needham on Friday. Needham increased DraftKings price target to $60 per share, which would be a 39% increase over the current price.
Needham cited its relatively fair valuation and its successful promotional strategies to engage and retain customers, particularly as the NFL season, the prime sports betting season, ends
But most of the other sports betting stocks were trending lower. Flutter stock was down about 0.5% on Monday, after opening up about 1%. Flutter has outperformed DraftKings over the past year, up about 23% while DraftKings is down roughly 3% over that stretch. But DraftKings has had more momentum so far this year, up 14% YTD.
Penn Entertainment (NASDAQ:PENN), which owns the ESPN Bet sports betting app, also saw it stock rise following the Super Bowl, up about 2%.
However, two other players in the sports betting space, MGM (NYSE:MGM) and Caesars (NASDAQ:CZR), saw their stocks drop. MGM fell about 2% earlier in the day (but recovered a bit by afternoon) while Caesars was off about 3% but has retraced most losses by afternoon. But these two stocks are more known as casino stocks and have a smaller presence in the online sports betting market.
So, it was a mixed bag. But investors can get more visibility on MGM and DraftKings as they report earnings this week. MGM releases earnings on Wednesday while DraftKings reports earnings on Thursday.