Online Gambling Stocks Poised for Growth: How DraftKings is Leading the Sector Toward Nasdaq 100 Inclusion

The anticipation surrounding the annual reconstitution of the Nasdaq 100 Index (NDX) is building, particularly among investors tracking the rapid expansion of the online gambling sector. As digital betting continues to reshape the financial landscape, DraftKings (NASDAQ: DKNG) appears to be a strong candidate for addition to the index. This inclusion process began last Friday, with the final results set to be announced on December 13.

Criteria for Inclusion

DraftKings’ elevation to the NDX will depend significantly on Nasdaq’s decisions regarding the stocks selected for the index. The previous year saw seven companies added and seven removed. As of late November, DraftKings was the ninth-largest stock on Nasdaq not currently part of the NDX, boasting a market capitalization of $21.42 billion, which places it favorably compared to some index members.

Current Membership in Next Generation Index

At present, DraftKings is a component of the NASDAQ Next Generation 100 Index, serving as a litmus test for potential NDX members. The Next Generation Index includes 100 large non-financial companies listed on Nasdaq and represents a promising transition for DraftKings.

• Other current gaming stocks in the Next Generation Index include Wynn Resorts (NASDAQ: WYNN), Caesars Entertainment (NASDAQ: CZR), and Churchill Downs (NASDAQ: CHDN).

Notably, DraftKings stands out as the only member among these with a credible potential for NDX inclusion.

Benefits of Joining the NDX

The benefits of being included in the Nasdaq 100 Index would be substantial for DraftKings. Currently, the stock is held by just 108 exchange-traded funds (ETFs). However, if added to the NDX, its visibility would significantly increase, leading to more investment interest from both active and passive funds.

• Joining the Invesco QQQ (NASDAQ: QQQ) and Invesco NASDAQ 100 ETF (NASDAQ: QQQM) could facilitate greater capital influx as these ETFs manage over $358 billion in assets.

This reconstitution event could mark a pivotal moment for DraftKings, potentially altering its trajectory within the gaming sector as it seeks to boost market capitalization and investor engagement.

Conclusion

As DraftKings awaits the final decisions regarding its potential inclusion in the Nasdaq 100 Index, the implications for the company could be profound. Increased visibility and investment opportunities will likely propel the company’s growth, reaffirming its status as a significant player in the gaming industry.