Betting on sports and sporting events has always been a deep part of the culture in the US and around the world. Limitations in the US drove most bettors to offshore sportsbooks catering to this lucrative market. The only land-based sportsbooks were located in Nevada casinos.
That all changed in May of 2018 due to a landmark US Supreme Court decision. This gave individual states the right to control legalized sports betting within their borders. When you consider that certain estimates put the size of the existing sports betting industry in the US at $150 billion, this became a very big deal overnight.
New Jersey sportsbooks were the first to capitalize on the situation opening up for sports betting in the state. Books like FoxBet, bet365, and BetMGM opened up. This was the state suing the federal government for these rights in the first place. A little more than two years later, 20 different states offer some form of legalized sports betting. The only two states in the nation that have yet to propose legislation regulating Utah sportsbooks and Wisconsin sportsbooks.
Legal sports betting in the US has opened the door to numerous companies working in different facets of the industry. Most states turned to their existing land-based casinos and racetracks to house the initial sportsbook facilities. A few states made the early push for sports betting online including horse race betting. This gave rise to companies such as DraftKings Sportsbook and FanDuel Sportsbook which both started as daily sports fantasy league sites.
Adam Silver is the league commissioner for the NBA. He has always taken a favorable stance for sports betting that is legal and regulated. In a recent agreement, MGM Resorts International teamed up with the NFL’s Denver Broncos as part of a marketing deal.
As professional sports leagues such as the NBA and NFL continue to partner with gaming companies, the mainstream attractiveness among investors will expand.
DraftKings is the early shining star. Following a three-way merger in April, the new company went public later that month. Trading on NASDAQ as DKNG, the market value of the stock has soared. This upward trend should continue with recent deals to expand into Colorado sportsbooks as well as opening up for Michigan online sportsbooks.
UK-based Flutter Entertainment entered the US market with its recent purchase of FanDuel. As part of a global sports betting group that also owns Paddy Power Betfair (PPB), expansion into this market remains a high priority. A relationship with Boyd Gaming was a natural first step since that company owns and operates 29 casinos across 10 different states.
Flutter has released figures stating that FanDuel has a 41 percent share of the US online sportsbook industry.
Penn National Gaming (NSADAQ: PENN) is another gaming company that is emerging as a major player in the sports betting sector. It currently operates retail sportsbooks across six different states. A recent marketing partnership with Barstool Sports should widen its exposure.