In the growing world of online gambling, there’s plenty of money to go around. 

ESPN’s deal to create a sportsbook brand with Penn Entertainment (PENN) might be lucrative, but it won’t come at the expense of current industry leaders. 

“Two things can be true: This can be a good deal for Penn at least vis a vis where they were prior to this deal, and it also can not have much of an impact on DraftKings,” explains Todd Jordan in this clip from The Call @ Hedgeye

DraftKings (DKNG) stock price fell 13% since Monday, but remains a Best Idea Long. Flutter (PDYPY), owners of chief competitor FanDuel, fell 7% before a Thursday rally. 

“The combined market cap those two companies lost yesterday was $2.5 billion to $3 billion. The amount gained by Penn was $300 million to $400 million,” Jordan adds. “The question is if this is really that value destructing. We don’t think it is.” 

Also contributing to the market movement was the belief Disney (owners of ESPN) also owned 4% of DraftKings, which was dispelled in a Disney (DIS) 10-Q filing. 

“It’s gone. It’s not an overhang anymore. So really, it’s about the competitive environment coming up,” Jordan says. “We’re firmly in camp DraftKings won’t be impacted to the extent the market thinks.” 

Watch the full clip above. 

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