{"id":134,"date":"2018-12-05T00:00:00","date_gmt":"2018-12-05T00:00:00","guid":{"rendered":"https:\/\/gbc.ng\/legal-sports-wagering-has-transfixed-the-nations-gaming-industry\/"},"modified":"2018-12-05T00:00:00","modified_gmt":"2018-12-05T00:00:00","slug":"legal-sports-wagering-has-transfixed-the-nations-gaming-industry","status":"publish","type":"post","link":"https:\/\/gbc.ng\/index.php\/legal-sports-wagering-has-transfixed-the-nations-gaming-industry\/","title":{"rendered":"LEGAL SPORTS WAGERING HAS TRANSFIXED THE NATION\u2019S GAMING INDUSTRY"},"content":{"rendered":"

By Howard Stutz, Executive Editor, CDC Gaming Reports<\/strong><\/p>\n

Forget new casino openings. Legal sports wagering is the gaming industry\u2019s fastest growth vehicle.<\/p>\n

Last week, before New York City became the gambling universe\u2019s 50-yard-line for the ICE Sports Betting USA conference, representatives of H2 Gambling Capital visited separately with gaming analysts Barry Jonas of SunTrust Bank and Cameron McKnight of Credit Suisse.<\/p>\n

The message from the United Kingdom-based data supplier to global gaming industry was the same to both analysts: by 2030, the regulated U.S. sports gambling market could produce revenues of $8 billion annually.<\/p>\n

\u201cWe continue to see sports betting as a long-term play, but likely not meaningful to earnings in the near-term,\u201d Jonas said told investors who might be considering stocks of the major casino operators.<\/p>\n

McKnight had similar observations.<\/p>\n

\u201cThe opportunity is significant, but legislation and market structure will take time to form,\u201d McKnight said. \u201cWe expect interest in sports betting to increase significantly in coming months, with many state legislatures back in session.\u201d<\/p>\n

Legal sports betting has skyrocketed since the May 14th<\/sup>\u00a0U.S. Supreme Court ruling that drove a stake through the Professional and Amateur Sports Protection Act. Seven states \u2013 including New Jersey, Mississippi and Pennsylvania \u2013 joined Nevada in the months following the justices\u2019 ruling.<\/p>\n

The focus, however, is on the next wave of gaming states, primarily the larger population centers of New York, Illinois, Michigan, Massachusetts and Ohio. Any of those states could skew the sports betting market.<\/p>\n

McKnight, however, said New York is \u201cthe only catalyst that matters in 2019.\u201d<\/p>\n

If the state legalizes sports betting, he believes it could be a boost to gaming company stock prices, which have declined to 52-week lows in recent months. MGM Resorts International, for example, is expected to close its $890 million purchase of Empire Casino and Yonkers Raceway near New York City by February.<\/p>\n

\u201cWe think investors are more likely to seriously ascribe value for sports betting when it is legal in New York,\u201d McKnight said.<\/p>\n

H2 founder Simon Holliday was part of a roundtable discussion hosted by McKnight, which included Florida-based gaming attorney Daniel Wallach and Gambling Compliance Managing Editor James Kilsby.<\/p>\n

The group suggested sports betting could settle into three to four dominant markets within three to six months after launching. If those key states \u2013 such as New York \u2013 join the wave, by 2023 sports betting could reach $4.5 billion to $6.5 billion in annual revenues, McKnight suggested.<\/p>\n

\u201cOne of our contacts recently increased their 2023 estimate by 10 percent, noting recent New Jersey sports betting volumes are in line with expectations,\u201d McKnight said.<\/p>\n

No one, however, discounts Nevada.<\/p>\n

New states haven\u2019t sliced into the Silver State\u2019s legacy sports betting market. Through the first 10 months of the year, revenue from sports betting is up more than 12 percent, and wagering is up just under 1 percent, suggesting Nevada will exceed last year\u2019s records of $248.7 million in revenue and $4.86 billion wagered.<\/p>\n

In its discussions with Jonas, H2 suggests other sports betting states will hold 10 percent of all wagers. Nevada has historically held 5 percent of all sports bets.<\/p>\n

\u201cH2 believes market conditions in Nevada, low tax rates, advantage players, etc., drive hold lower than their expectations for potential U.S. regional markets,\u201d Jonas said.<\/p>\n

McKnight\u2019s panel expressed two concerns \u2013 potential federal intervention into sports wagering and the professional leagues\u2019 continued efforts to gain so-called \u201cintegrity fees,\u201d a piece of the wagering action, so to speak.<\/p>\n

Despite roadblocks that will come from the American Gaming Association, gaming companies and several key elected leaders \u2013 such as Nevada Rep. Dina Titus, D-Las Vegas \u2013 McKnight said federal action on sports betting \u201csounds more likely, though our contacts disagree on scope. All agree that there are several complex issues that are largely untested.\u201d<\/p>\n

The Credit Suisse panel also believed the sports leagues\u2019 efforts on integrity fees \u201care only beginning.\u201d Three of the leagues \u2013 the National Basketball Association, the National Hockey League, and Major League Baseball \u2013 all have data share deals and marketing agreements with MGM.<\/p>\n

How sports betting is legislated in larger states, such as New York, Massachusetts and Illinois, will provide a clearer picture.<\/p>\n

The sports wagering explosion has created a market for ancillary businesses. There are three additional sports betting conferences scheduled for next year. Websites focused on sports betting \u2013 Legal Sports Report, SportsHandle, Covers.com, and others \u2013 have blossomed. Gaming technology companies \u2013 International Game Technology and Scientific Games, for example \u2013 touted their sports wagering systems at the Global Gaming Expo in Las Vegas.<\/p>\n

\u201cSports betting is seen as a net positive for suppliers at all levels of the value chain,\u201d Jonas said.<\/p>\n

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