The US Supreme Court ruling in May 2018 struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA) which was the federal law that prevented sports betting from taking place. The repeal allowed individual states to make the decision whether they want to legalize sports betting and in the last 12 months, as many as 20 states have passed legislation to allow regulated sports betting, thus revolutionizing the online gambling market in America.
There are many states that are currently debating the pros and cons of legalizing other forms of online gambling such as online casino games and online poker. For example, Charlie Baker, the governor of Massachusetts, has proposed legalizing both sports betting and online gambling in the state.
The legalization of sports betting across the United States is a good thing as it significantly shuts down the illegal betting market which used to bring in as much as $150 billion each year. Some of the top gaming operators in the country are expected to see a significant spike in their revenues as they look to capture a significant portion of this lucrative sports betting market. Their shares are sure to appreciate as gambling companies take advantage of this bonanza.
Operators Eager to Get the Ball Rolling
The time is ripe to make some early investments in the US online sports betting industry. In fact, several companies are now in a position to profit from the newly regulated market, and these companies range from sports betting operators, sports betting software providers and casino operators who partner with sportsbooks. Their profits are expected to keep growing as more states start jumping on the sports betting bandwagon.
A few analysts have even predicted that social media giants such as Google, Twitter, and Facebook are also gearing up to rake in their share of legalized sports betting profits. Sports enthusiasts all over the world are expected to place bets worth $1 trillion annually by the year 2022. It, therefore, makes sense to get ready to grab your share of the profits by investing wisely in the stocks of top sports betting operators and providers.
The following is a list of different types of companies that are expected to profit from the Supreme Court ruling:
- Casinos & Racetracks– Initially casinos and racetracks were not happy with the Supreme Court ruling as they felt that they would lose customers. But many of them are seeing opportunities for growth in the change. Racetracks, in particular, have realized that their horse betting customers would also like to bet on other sports.
- Technology Providers– Software providers and app developers are going to grab the biggest share of the pie as a lot of sports bets will be placed online.
- Fantasy Sports– DraftKings and Fan Duel, which currently run online sports betting sites in New Jersey, are expected to enter into other US states as soon as they legalize sports betting.
- Professional Sports Teams– Owners of professional sports teams have gladly embraced the idea of legalized sports betting and are looking for ways to profit from it.
We have listed a few companies and providers that you can keep a close watch on going forward:
Penn National Gaming
Things have been a bit bumpy for Penn National Gaming over the last few years, but they can now change for the better because of legalized sports betting. The company, which has a market cap of $2.7 billion, now plans to invest $3.1 million in launching sports betting in its Hollywood Casino and its five casinos across Mississippi. Moreover, the operator is also in the process of acquiring the Greektown Casino Hotel from Dan Gilbert, the owner of Cleveland Cavaliers for $300 million.
Boyd Gaming Corporation
Boyd has 29 gambling properties across ten US states. Moreover, it has gained a lot of experience by handling Las Vegas’s biggest sportsbooks and is very keen on establishing its presence in more states as they lift the ban on sports betting.
Boyd Gaming recently entered into a partnership with MGM Resorts, a chain of hotel casino resorts that has similar aims. The two companies will share mobile and online gambling platforms, with Boyd trading its sportsbook apps for MGM’s casino gaming and online poker gaming apps in 15 US states. One can expect the rise of a large online sports betting empire run by the two giant companies soon.
International Game Technology
International Game Technology (IGT), which had jumped to a $31 high, had plunged to $14 in November. Early in December, it stabilized to $16. Although it is a huge company that has developed a larger number of casino platforms than its rivals, it started seeing progress only after it got into sports betting.
IGT stocks are worth watching, considering the fact that IGT processed sports bets worth $12 billion in 2017. Experts expect IGT’s profits to grow at the rate of 153.3 percent during the next financial quarter.
FanDuel is one of the biggest Daily Fantasy Sports (DFS) providers in the United States along with DraftKings. FanDuel is currently not a public listed company but there have been rumors that FanDuel is looking to go public in a reverse merger. The company is estimated to be around $1.2 billion in value and is looking to capitalize on the growing sports betting market in the US.
If FanDuel does go public, you should look at getting some of its shares during its IPO.
As more state governments legalize sports betting, bettors will find a safe and secure betting environment encouraging them to keep betting which will result in sports betting operators making their profits, smart investors boosting their passive income and state and local governments bringing in a new stream of income in the form of betting taxes.