DraftKings leaps 9% after Gov. Cuomo announces plan to authorize mobile sports betting in New York

• DraftKings soared as much as 8.8% on Wednesday after New York Gov. Andrew Cuomo unveiled legislation backing mobile sports gambling in the state.
• Should the law pass, New York would become the most populous state yet to embrace online sports betting.
• Cuomo backed the measure as part of his plan to revive state tax revenues after they plunged amid the coronavirus pandemic.
• The governor's proposal will require gambling operators such as DraftKings to receive state licenses and partner with gaming companies already operating in certain areas of the state.
• Watch DraftKings trade live here.

DraftKings rallied as much as 8.8% on Wednesday after New York Gov. Andrew Cuomo revealed legislation to allow for mobile sports gambling in the state.

The move stands to make New York the most populous state yet to embrace the betting industry. Cuomo previously stopped short of embracing online betting, arguing that a constitutional amendment is necessary to allow for such business.

The governor's new proposal will require mobile gambling operators to receive state licenses and partner with existing gaming companies.

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DraftKings pared gains Wednesday afternoon and traded roughly 3% higher.

Cuomo endorsed the legislation as part of his plan to help the state rebound from the coronavirus pandemic. The health crisis and its economic fallout slammed states' tax revenues, leaving governments to cut costs and look for new sources of income.

"New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting we aim to keep millions of dollars in revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis," Cuomo said in a statement.

New Jersey legalized sports betting in June 2018, leading some New York residents to travel into the state to make bets. An industry survey cited by Cuomo found that nearly 20% of New Jersey sports betting revenue comes from visiting New Yorkers.

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The neighboring state's latest report on sports betting suggests New York has been missing out on millions of dollars in taxes. New Jersey recorded $50.6 million in sports betting revenue in November, according to a state report. The sales fueled $6.2 million in state tax income.

Separately, Cuomo also backed the legalization of marijuana in New York to further prop up tax revenues. The news further lifted cannabis stocks already climbing on Democrats' victories in Georgia Senate runoff elections.

DraftKings traded at $49 as of 1:20 p.m. ET Wednesday. The company has 23 "buy" ratings and eight "hold" ratings from analysts.

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