Morgan Stanley is still bullish on the future of online gambling in the US, but that didn’t stop the Wall Street company from lowering its estimate of future projections. From a previous number of $5 billion in revenue by 2017, Morgan Stanley is dropping that number to $3.5 billion, partly due to what it described as “worse-than-expected technical issues in its projection”.
In addition, projections for 2020, which was initially at $9.3 billion, has also been lowered to $8 billion.
Nevertheless, the firm still believes that there’s still a bright future for the industry now that the seeds are being planted by a number of states in the US. The decision to lower its estimates wasn’t brought about by observing the disappointing returns online gambling has had so far in New Jersey, but more so on the new understanding of how the business works after following and observing the first few months of operations in Jersey, Nevada and Delaware, the three states that are currently offering legalized online gambling.
New Jersey was observed pretty carefully and not surprisingly, projections for the state’s online gambling revenue also took a sharp dive from $541 million to just $203 million. The company remains confident that whatever issues the state currently has, including problems implementing geolocation technology, can be resolved over time. Until that time happens, though, the company is going to be more conservative with its month-to-month growth estimates.
Equally important is the company’s projections on whether the number of states to offer online gambling will grow past the three that are already offering it. California and Illinois are possibilities to enter the mix and if given the right push by their local legislators, legalized online gambling in both states could come by year’s end.