Since the landmark 2018 Supreme Court decision that opened the door for US states to legalize sports betting, the industry has experienced explosive growth, rapidly evolving into a $10 billion behemoth. According to insights from Goldman Sachs Research, significant expansion may lie ahead, fueled by a combination of new state openings and increased consumer spending on sports betting.
Forecasting the Future: Insights from Goldman Sachs Research
Ben Andrews, head of leisure and travel research for Goldman Sachs Research in Europe, offers valuable perspective on the trajectory of the US sports betting market. Drawing on a model that assesses states’ likelihood to approve sports betting legislation and consumers’ spending potential, Andrews predicts that annual legal spending on sports betting in the US could reach a staggering $45 billion once the market matures. This forecast underscores the immense growth potential that still exists within the industry.
Navigating the Market Dynamics: Not Early Days, But Not Yet Mature
Noah Naparst, who evaluates sports betting companies for Goldman Sachs Asset Management, provides insights into the current state of the market. Naparst suggests that while the industry is not in its nascent stage, it has yet to reach full maturity. With approximately half of US states legalizing mobile sports betting and ongoing improvements in product offerings, existing markets continue to experience robust growth. This dynamic landscape presents both opportunities and challenges for stakeholders navigating the evolving sports betting ecosystem.
The Evolution of Wagering: From Predictions to Parlays
One notable transformation in the sports betting landscape is the increasing popularity of parlays – bets that combine multiple wagers into a single bet. Ben Andrews highlights the rapid rise of parlays as a distinctive feature of the US sports betting market. Favored for their potential for high payouts akin to lottery wins, parlays have captured the attention of both bettors and operators alike. As parlays continue to gain traction, along with enhancements in in-game betting products and personalized user experiences, the sports betting landscape is poised for further evolution.
The Convergence of Media and Betting: A Paradigm Shift
Noah Naparst underscores the growing convergence of media, sports, and betting as a pivotal development shaping the future of the industry. With the rise of in-game betting, Naparst envisions a future where media companies play an integral role in the sports betting experience. Imagine watching a basketball game on a betting app, with real-time odds displayed on screen, offering viewers the opportunity to place bets seamlessly within the viewing experience. This convergence represents a paradigm shift with far-reaching implications for the sports betting and media landscapes alike.
Navigating the Future of Sports Betting
As the US sports betting industry continues its upward trajectory, stakeholders must adapt to evolving market dynamics and seize opportunities for innovation and growth. With insights from Goldman Sachs Research, industry players can gain valuable perspectives on the factors driving market expansion and the transformative trends shaping the future of sports betting in the US.
Top 8 Sports Betting and Gaming Stocks and ETFs
PENN Entertainment (PENN) is a prominent player in the gaming and racing industry, specializing in slot machine entertainment. The company manages various gaming and racing facilities, along with video gaming terminal operations. Its operations are segmented into Northeast, South, West, Midwest, Interactive, and Other. Properties under its Northeast segment include Ameristar East Chicago, Greektown Casino-Hotel, and Hollywood Casino Bangor. In the South, it operates properties like 1st Jackpot Casino, Ameristar Vicksburg, and Boomtown Biloxi. The West segment includes Ameristar Black Hawk, Cactus Pete’s and Horseshu, and M Resort. Meanwhile, the Midwest segment comprises properties such as Ameristar Council Bluffs, Argosy Casino Alton, and Argosy Casino Riverside. Additionally, the company operates online sports betting and casino applications under its Interactive segment, with other properties managed under the Other segment, including Freehold Raceway, Retama Park Racetrack, and Sanford-Orlando Kennel Club.
DraftKings (DKNG) is a digital sports entertainment and gaming company offering online sports betting, online casino, and daily fantasy sports products. It also operates DraftKings Marketplace, retail sportsbook, media, and other consumer product offerings. With a focus on providing diverse and engaging experiences, DraftKings has positioned itself as a leading player in the digital gaming space, catering to a wide range of consumer preferences.
Caesars Entertainment (CZR) manages a portfolio of casinos and resorts under iconic brands such as Caesars, Harrah’s, Horseshoe, and Eldorado. Its operations are segmented into Las Vegas, Regional, Caesars Digital, Managed and Branded, and Corporate and Other. Leveraging its extensive network of properties, Caesars Entertainment offers a comprehensive range of gaming and entertainment experiences, targeting both domestic and international markets.
VanEck Gaming ETF (BJK) seeks to replicate the performance of the MVIS Global Gaming Index, with a focus on companies generating at least 50% of their revenues from gaming activities. This ETF offers investors exposure to the global gaming industry, including casinos, sports betting, and gaming technology companies, providing diversified investment opportunities in the gaming sector.
Roundhill Sports Betting & iGaming ETF (BETZ) aims to track the performance of the Roundhill Sports Betting & iGaming Index, investing primarily in securities issued by sports betting and iGaming companies. With a focus on capturing the growth potential of the sports betting and iGaming sectors, this ETF offers investors access to companies driving innovation and expansion in the digital gaming space.
MGM Resorts International (MGM) is a leading casino resort operator, offering gaming, hotel, convention, dining, entertainment, and retail amenities. With a strong presence in key markets like Las Vegas and China, MGM Resorts caters to a diverse clientele seeking premium hospitality and gaming experiences.
GAN Ltd (GAN) develops and sells internet gambling software-as-a-service solutions, serving both business-to-business (B2B) and business-to-consumer (B2C) segments. Its offerings include comprehensive player registration, account funding, and back-office management tools for casino operators, along with a B2C online sports betting and casino platform accessible across multiple markets.
Churchill Downs (CHDN) operates as a provider of pari-mutuel horse racing, online account wagering on horse racing, and casino gaming. With a diverse portfolio of racing and casino properties, including Churchill Downs Racetrack, Arlington Park Racecourse, and various casino resorts, Churchill Downs offers a comprehensive suite of gaming and entertainment options for patrons.
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This content is provided for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to buy any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above content might not be suitable for your particular circumstances. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor.
