DraftKings, Golden Nugget Online, Skillz Headline Gaming Additions to Russell 3000

DraftKings (NASDAQ:DKNG), Golden Nugget Online Gaming (NASDAQ:GNOG), and Skillz (NYSE:SKLZ) are among a slew of gaming equities gaining entry into the widely followed Russell 3000 Index.

The annual Russell rebalancing process, which pertains to an assortment of popular equity benchmarks, concludes on June 28. But the index provider on Monday gave a preview of additions and deletions to the Russell 3000.

As was widely expected, DraftKings made the cut for Russell 3000 entry 16 months after going public. Though ensconced in controversy today as a short seller alleges illegal gambling, money laundering, and links to organized crime at the company’s SBTech unit, the sportsbook operator has a market capitalization of $20.49 billion, making it one of the larger addition to the equity index.

Bumper Crop of Gaming Equities Join Russell 3000

In addition to DraftKings, the group of gaming equities joining the Russel gauge cement the notion that online casino and sportsbook operators are not only increasingly prominent pieces of the broader gaming industry puzzle, but rising parts of the related investment lexicon as well.

GNOG and Rush Street Interactive are also slumping, with an average year-to-date loss of 35 percent. However, the companies are bullish on their prospects, as is Wall Street, with some analysts and industry observers highlighting iGaming, not sports betting, as a premier driver of margin expansion and profitability for gaming operators going forward.

For its part, Skillz, like DraftKings, drew the ire of bearish researchers, and the shares remain volatile, up 44 percent over the past month, but down 10 percent over the past week. DraftKings, GNOG, Rush Street, and Skillz share something in common: All four came to market following mergers with blank-check companies.

Important for These Gaming Equities

For the aforementioned gaming names, joining the Russell 3000 represents the companies’ first entry into a major equity index. In the case of DraftKings, that company is in a position to perhaps join the Nasdaq-100 later this year, and could be added to several other Russell benchmarks later this month.

Although other stock gauges, such as the S&P 500 and Russell 1000, have more assets benchmarked to them, entry into the Russell 3000 puts these gaming equities in front of a wide audience of investors and qualifies the names to join a slew of passive index funds and exchange-traded funds (ETFs).

Among land-based casino operators, Full House Resorts (NASDAQ:FLL) is the only one joining the Russell 3000, according to index provider data.