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DraftKings Stock Falling Amid Reports Of Illegal Gambling Ties

The sports gaming company saw its stock price drop on Tuesday morning.

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Courtesy: DraftKings

DraftKings is in some hot water following a report released on Tuesday. The sports gaming company saw its shares fall 11% in early trading after the short-seller Hindenburg Research unveiled findings that the company has ties to unregulated and illegal gambling.

According to the small New York-based group, the problems stem from SBTech, who Draftkings merged with as they went public last year through the Diamond Eagle Corporation. Shalom Mckenzie, the founder of SBTech, is now a board member at DraftKings.

The report stated that SBTech receives half of its revenue from unregulated or banned gambling markets like China and Vietnam.  

Hindenburg has taken a short position on the DraftKings stock, meaning they stand to gain financially if the price keeps falling like it did on Tuesday morning. The company’s stock is down almost 13% over the past week.

“This report is written by someone who is short on DraftKings stock with an incentive to drive down the share price,” a DraftKings spokesperson wrote in a text message to Sportico. “Our business combination with SBTech was completed in 2020. We conducted a thorough review of their business practices, and we were comfortable with the findings. We do not comment on speculation or allegations made by former SBTech employees.”

Sportico also discussed the issue with Credit Suisse, an investment bank bullish on DraftKings’ long-term future.

“Our view is that SBTech was purchased by DKNG for its tech platform (which DKNG plans to vertically integrate) rather than existing revenue stream. Said another way, if SBTech revenue were to go away entirely, we think there would be minimal impact on the DKNG stock,” analyst Benjamin Chaiken wrote to Sportico.

DraftKings and many other sports gaming companies are hoping the return of full stadiums can make 2021 a big year for sports betting stocks

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Barstool Sports Becomes Sponsor, Exclusive Rights Holder For Arizona Bowl

“Portnoy, the Barstool founder, announced the agreement on social media today in one of his Emergency Press Conferences.”

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It is a time of upheaval in the world of college football. Any time an institution in the sports world goes through a major culture shift, Dave Portnoy finds a way to put Barstool Sports in the middle of the action and right now is no exception.

The Arizona Bowl announced a unique partnership with Barstool Sports on Tuesday. The company will become the title sponsor for the Tucson, Arizona bowl game. It will also become the new exclusive rights holder. The game had been partnered with CBS, with the game moving from CBS Sports Network to CBS just last year.

Now, fans that want to watch the Arizona Bowl will need an internet connection. Barstool Sports will have the exclusive media rights. The game will stream on Barstool’s website as well as on the company’s social media channels.

Portnoy, the Barstool founder, announced the agreement on social media today in one of his Emergency Press Conferences. He promised that Barstool would have a hand in everything from distribution to the halftime show, calling the opportunity “our unicorn”.

The Arizona Bowl is in the perfect position to experiment with how it is delivered to fans and what experiences it can provide those in attendance. It is not one of the multiple bowls owned by ESPN. It has never had a longterm media rights deal. On top of that, the matchup between teams from the Mountain West and the MAC could use a little extra juice in order to attract more casual fans.

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Wake Forest Latest School To Require Vaccine For Media

The private institution has already mandated the vaccine for all in-person students.

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Courtesy: Wake Forest

Vaccine mandates are popping up across the country as access to the shot grows, especially in sports. The NFL handed down strict protocols that all but required players to get the shot. Following suit with many private institutions at the college level.

Notre Dame required all media members to be vaccinated if they want access to teams in person, and now Wake Forest has done the same.

“Wake Forest, which requires all students to be vaccinated for COVID-19 upon return in the fall,” Stadium’s Brett McMurphy tweeted on Monday. “Will require every member of media that participates in any in-person media opportunity at Wake to be fully vaccinated.”

It’s an easy decision for a private university like Wake Forest. They are doing all they can to ensure as few problems with COVID-19 this academic year as possible. The school made a widespread announcement about the policy back in late May:

“Wake Forest has published its COVID-19 Vaccine Policy on the Our Way Forward website. The policy applies to all Wake Forest students (undergraduate, graduate, and professional school) who reside in University housing, are enrolled in in-person classes, and/or who participate in any in-person activities on the Reynolda, Brookstown, Wake Downtown, and Charlotte campuses, and/or who participate in any Wake Forest-sponsored study abroad or study-away programs. 

Students must submit documentation providing proof of full COVID-19 vaccination to the Student Health Portal by July 1, 2021. Students may submit a request for a medical or religious exemption; however, such exemptions will not apply to students studying abroad on Wake Forest-sponsored programs.”

Policies will differ at institutions throughout the country as college football coaches (mostly) try to wield their power to entice their players to get vaccinated. Multiple power conferences have announced the forfeiture of games if one outbreak occurs before a matchup. 

College sports and the NFL showed flexibility during an uncertain time last year. It’s no more Mr. Nice Guy now that a vaccine has rolled out and is fully available across the country.

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Agent: Barstool Could Be A Force In Athlete Representation

Sportico notes that when it comes to social reach, Barstool has just under 3 million Twitter followers. Wasserman has the most of any big four sports agency at just over 30 thousand followers.

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Barstool Sports founder Dave Portnoy is known to call “Emergency Press Conference’s” from time to time. That’s exactly what he did on July 1 when the NCAA changed its regulations on college athletes profiting off their name, image and likeness.

During the “press conference,” Portnoy announced the start of Barstool Athletes Inc., a new sports agency that will represent college athletes.

The idea came from Adelaide Halverson, a Jacksonville State volleyball player who direct messaged Portnoy on Instagram asking if Barstool would represent her.

While the idea for Barstool to start this company came somewhat on a whim, Portnoy has a history of turning random ideas into successful, money-making opportunities.

According to Sportico, CSM Sport & Entertainment Insights manager Andy Marston said long-established agencies shouldn’t overlook Barstool entering the sports agency space.

“Many agencies [know they] are underprepared when it comes to having their own audience,” said Marston. “[The Barstool announcement was a reminder that] if they don’t build up [or acquire] an audience of their own, they may start losing top talent to media-led companies that can offer greater attention and greater [financial] rewards.”

Sportico notes that when it comes to social reach, Barstool has just under 3 million Twitter followers. Wasserman has the most of any big four sports agency at just over 30 thousand followers.

Right now, most agencies use third-party data and targeting, but with large companies beginning to block much of the data-tracking that allowed Google and Facebook advertising to be so targeted, Marston predicts that sports agencies will look “to acquire media companies” and the audience that comes with them moving forward.

As reported by Sportico, Chris Ebmeyer, VP, Director of Media Services at 160over90, believes that while we “might see agencies acquiring media [platforms] and acquiring audiences,” it’s more likely we’ll see media companies introducing agencies, similar to Barstool Athletes Inc.

“It provides them with a way to cater to advertisers in a greater fashion,” said Ebermeyer.

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