Analyst warns MLB labor dispute could hit sportsbook stocks in 2027

Possible lockout looms

Major League Baseball is facing a possible labor lockout ahead of the 2027 season that would likely weigh on sportsbook stocks, according to Citizens Equity Research analyst Jordan Bender. The analyst said the current state of affairs between the league and the MLB Players Association is comparable to what was seen in 1994, when labor negotiations led to a 232-day strike that resulted in the cancellation of much of the regular season, the playoffs and the World Series.

The primary sticking point in the upcoming negotiations appears to be a potential salary cap, which owners want to implement to limit team spending, while the players’ union opposes such restrictions, Bender said.

Largest operators most exposed

FanDuel owner Flutter Entertainment and DraftKings are most exposed to potential adverse effects from an MLB strike because they are the two largest U.S. sportsbook operators, Bender said. DraftKings reports third-quarter results on Nov. 5 and is widely expected to issue initial 2027 guidance.

FanDuel and DraftKings are forecasting handle growth of 3% and 7%, respectively, over the second and third quarters of 2027. However, Bender estimates DraftKings’s and Flutter’s handle will decline by high-single digits in 2Q27 and 3Q27.

Baseball’s share of handle

Bender estimates the baseball sports betting handle will total approximately $19 billion in 2026, representing approximately 25% of total industry handle in 2Q26 and 24% in 3Q26. The analyst estimates FanDuel and DraftKings would face handle declines of 32% for DraftKings in 2Q27 and 33% for FanDuel if MLB games are canceled.