Everything Investors Need To Know About Legal Sports Gambling
Zacks Investment Research | May 21, 2018 02:44AM ET
Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research. On this week’s episode, Ben Rains breaks down everything investors need to know about the future of the legal sports gambling industry after the U.S. Supreme Court’s historic ruling.
At this point, many investors have heard that legalized sports betting could be headed to a state near them. But many questions remain: from which states will adopt sports gambling and which companies stand to benefit the most to how revenues will be taxed.
These questions will begin to be sorted out over the next several years. And investors will want to pay close attention because the illegal sports gambling industry is reportedly worth as much as $400 billion a year in the U.S. alone.
The big four North American sports leagues, the NFL, NBA, MLB, and the NHL are set to benefit, with billionaire owner of the Dallas Mavericks, Mark Cuban, going as far as to tell ESPN that the Supreme Court decision “doubled the value of the professional sports franchises in a second."
The leagues hope that legalized sports betting creates more engagement with their sports, which in turn should help them negotiate better television deals with the likes of ESPN (NYSE:DIS) , NBC (NASDAQ:CMCSA) , FOX (NASDAQ:FOXA) , CBS (NYSE:CBS) , and maybe even Amazon (NASDAQ:AMZN) , and other streaming players.
Furthermore, tech companies such as Amazon, along with Google (NASDAQ:GOOGL) , Facebook (NASDAQ:FB) , and Twitter (NYSE:TWTR) have the infrastructure and user base that could see them benefit from legalized sports betting if they wanted to. Meanwhile, the likes of Microsoft (NASDAQ:MSFT) , Sony (NYSE:SNE) , and some Wall Street financial firms have reportedly applied for sports betting patents.
Even if these big-name tech firms don’t roll out their own sports betting platforms, they could easily invest in the array of app-based startups that are sure to pop up as mobile gambling becomes more and more popular. Therefore, the need for real-time data along with fast and secure payments will also become paramount.
Investors should pay close attention to how the MGMs (NYSE:MGM) and Las Vegas Sands (NYSE:LVS) of the world adapt and invest in the future of sports betting. Meanwhile, William Hill WMH , Stars Group (NASDAQ:TSG) , as well as DraftKings and FanDuel, and many other companies could benefit hugely from legalized sports betting.
Make sure you listen to the full episode in order to gain a more complete understanding of what the future of sports betting in the U.S. might look like.
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