Piper Sandler sees big gains for DraftKings, Penn National as sports betting market expands

Tennys Sandgren of the United States returns a ball during the singles match against Christopher Eubanks of the United States during the DraftKings All-American Team Cup on July 4, 2020 in Atlanta, Georgia.
Carmen Mandato | Getty Images

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DraftKings and Penn National Gaming are poised to take a substantial piece of the growing online betting market, according to investment firm Piper Sandler.

The firm initiated coverage of both stocks with an overweight rating on Friday, saying the sector has "numerous tailwinds" to help the stocks outperform the broader market.