Investor Interest Increases in Legal US Sports Betting Industry
Prior to May of 2018, the legal sports betting industry in the US consisted of various land-based retail sportsbooks in the state of Nevada. Most of those books were located in casino venues concentrated in and around Las Vegas and Reno.
That all changed three years ago when the US Supreme Court went against the federal government to give individual states the right to govern legal sports betting within their borders.
New Jersey led the charge as the plaintiff in that landmark court case. Since then, the Garden State has quickly grown to become the top legal sports betting market in the nation in terms of the monthly betting handle. Since opening its first sportsbook in June of 2018, New Jersey has posted a total betting handle of $13.5 billion dollars.
The handle represents the total amount of money wagered on sports or sporting events over a set period of time such as a month or a year.
To date, there are 21 different states plus the District of Columbia offering legal sports betting in some form. A few others have passed laws legalizing sports betting and they are in the process of planning their launch.
The rest of the states in the country are addressing the issue one way or the other through the legislative process.
Major players have quickly evolved such as FanDuel, DraftKings and BetMGM as the market leaders in the regulated US sportsbook industry. Other books such as Barstool, WynnBET and Caesars are actively trying to close the early gap.
Major pro leagues including the NFL, NBA, MLB and NHL have fully embraced the idea of legal US sports betting after actively lobbying against it for decades. They are all actively trying to carve out their piece of the revenue pie.
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While all this has been taking place over the past three years, both commercial and individual investors have been closely following this industry in light of its highly accelerated rate of growth.
These same investors have also locked their attention on the states that are not yet in the game. There are still a few major US markets that have the ability to really move the dial when it comes to the anticipated growth of gaming stocks.
Gov. Andrew Cuomo in New York is pushing hard for legal mobile sports betting throughout his state. Gov. Ron DeSantis in Florida has been working directly with the Seminole Tribe on the expansion of state gaming into legal sports betting.
The two other big fish in this pond are Texas and California. There is still some rather strong resistance to legal sport betting that needs to be overcome before either of these states join the party.
Going back to 2018, there have been 10 different private equity deals in the US sports betting industry of note. Specific financial data makes note of more than $700 million of raised capital to orchestrate these deals.
FanDuel was bought by Ireland’s Flutter Entertainment as one of the biggest sportsbook companies in the world.
DraftKings went public in 2020 through a reverse merger with Diamond Eagle Acquisition as a SPAC (Special Purpose Acquisition Company).
BetMGM is backed by MGM Resorts International as a major player in the casino, hospitality and entertainment industry.