DraftKings and Flutter Entertainment rally after sports betting is approved in Missouri

Voters in Missouri passed Amendment 2 by a narrow margin to open up the state to sports betting, according to projections. With 3,570 of 3,572 precincts reported voting totals, the amendment had the support of 50.2% of the voters.

The amendment authorizes the Missouri Gaming Commission to regulate sports wagering and issue licenses to several types of operators, including existing Missouri casinos, online platforms such as DraftKings (NASDAQ:DKNG) and FanDuel (NYSE:FLUT), and professional sports teams. The amendment also includes financial provisions, such as establishing a $500,000 license application fee with a five-year renewal requirement, and a 10% wagering tax on adjusted gross gaming revenue.

Missouri is one of only 12 states where sports betting is not legal. Neighboring states like Kansas, Iowa, and Illinois have increased state tax revenue by approving sports betting. A $43 million campaign supporting the amendment has been funded entirely by DraftKings (DKNG) and FanDuel (FLUT) as the two U.S. market share leaders eye the potential in the nation’s 18th largest state. The amendment also authorizes additional sports betting licenses for professional sports teams, which had teams in Kansas City and St. Louis offering their public support for the measure.

Shares of DraftKings (DKNG) rallied 4.75% in premarket action on Wednesday, while Flutter Entertainment (FLUT) was up 2.45%.