Craig-Hallum says sports betting selloff today an overreaction

Craig-Hallum thinks online sports betting stocks are overreacting today in response to NCAA President Charlie Baker releasing a statement on efforts to ban player prop bets on college games. Another Wall Street Journal article on VIP programs being investigated is also a factor in the selloff, the analyst tells investors in a research note. The firm, which agrees a college prop ban should happen to protect student-athletes and increase the integrity around sports and betting, believes a low-single-digit percentage of bets is at risk with a majority of those dollars likely redirected to game outcomes if a ban is universally enacted across states. It sees buying opportunities on the pullbacks, noting about half of states are already banning college player props. The firm’s Buy ratings in the group are DraftKings (DKNG), Flutter Entertainment (FLUT), Genius Sports (GENI) and Sportradar (SRAD).