As many expected would happen, March Madness has caused a boon for the industry, something reflected in the stock performance of betting companies. This provides a measure of relief as share prices had been going through a sluggish patch recently.
After one week of the men’s NCAA Division I basketball tournament, a number of indices and share prices are on the up: the Roundhill Sports Betting & iGaming exchange-traded fund known under the moniker BETZ has risen by 12%. In related news, DraftKings has seen its stock rise by 29% while Penn National Gaming has gone up by 11%.
This uptick is typical for March. In the United States, the month is the fifth-biggest betting month of the year, though, if you take away the months with football, it immediately comes to the top of the ladder.
This bump mirrors what was seen in the lead up to the Super Bowl, another gigantic event in the sports betting calendar. With these sorts of draws an increase in revenue is usually tempered by outsized spending on promotions. Nonetheless, stock prices have benefitted.
Once the madness subsides, though, there will continue to be lingering questions about the profitability of betting companies and, as a result, the performance of their share prices. With all the money spent on marketing and promotions, losses continue to mount for the sportsbooks. While it is easy to see this fact as the birth pangs of a fledgling industry, it does auger continued uncertainty for at least the near future.
