Sports betting companies in the US and their investors are excited at the prospects of legalization. As more states are allowing legal sports wagering in their jurisdictions, the industry believes that the size of the US market will grow to $7 billion to $8 billion by 2025.
Good times ahead
During the NYC Sports Betting Investor Summit, panelists said that the industry is growing at a fast pace after the US Supreme Court struck down PASPA. In a historic case, the court decided in favor of the State of New Jersey and paved the way for all 50 US states to create their own laws and offer legalized sports wagering. To date, 14 states have created sports betting laws while many others are considering similar bills.
Morgan Stanley believes that the industry’s revenue will grow from $833 million in 2019 to $7 billion in 2025. If all states legalize gambling, the figure could go beyond $15 billion. Last year, it expected the industry to grow to $5 billion. The sports betting market is still not mature in the US. The market size estimated by the investment firm is less than 1/5th of what commercial casinos made last year, i.e. $41.7 billion. States can still count on a substantial and relatively steady stream of revenue to their coffers.
Participants from Mohegan Sun, Hard Rock and MGM Resorts also predicted that revenue would grow to $6 billion to $8 billion. Eilers & Krejcik Gaming, a research firm, also concluded that these figures are close to their own predictions.
What’s the catch?
While the industry has a wide scope of growth, it started only one and a half years ago. The cost of promoting service and gaining customers is still relatively huge. This will lead to failure for some operators currently working in the market. PointsBet chief information officer Seth Young noted,
“It’s, war out there. At the end of the day panelists, there’s going to be a lot of carcasses out there on the road.”
Young had some strong words for the industry and president of interacting gaming for MGM Resorts International, Scott Butera supported him. He said that the market is growing, but the conditions are very tough to operate. Every operator that can enter the market will try to establish their presence in the US, but eventually, some will be thrown out due to intense competition. He also said that the actual size of the sports betting market in the US could cross the Monday predictions of $8 billion.