It’s been said previously that the offshore sports gambling market in the U.S., prior to last year’s approval by the Supreme Court to give back control to the states, was worth $150 billion a year. Of course, there’s no true way to calculate how much money is spent on the activity since tracking the revenue is impossible. However, what is known, based on the preliminary statistics across the last 18 months or so, is that there’s a lot of money to be made in sports gambling. There’s even more waiting, though, and Morgan Stanley believes the number will reach $7-$8 billion within the next six years.
On November 11, industry representatives at the NYC sports Betting Investor Summit, including some from MGM Resorts, Mohegan Sun and Hard Rock International, got together to talk about numbers. This year, about $833 million is expected to be seen in the U.S. sports gambling market, and that comes from just 14 states – some of which are only now launching the activity.
Soon after the Supreme Court shot down PASPA and told lawmakers they were wrong to have approved it, states began to roll out legalized sports gambling, New Jersey being the first. At around this time last year, the consensus was that, by 2025, the market would be worth about $5 billion. Given the growth seen in 2019, everyone is revising their forecasts and taking a more bullish approach on the future.
As with any industry, though, not everyone is going to survive. Those who aren’t able to manage their finances and overextend themselves thinking they’ll be able to control a huge majority of the highly competitive market are going to fall flat on their faces. This isn’t anything that hasn’t been seen in any new commercial offering throughout history and it’s to be expected. MGM’s president of interactive gaming, Scott Butera, asserts, “It is a growing market here in terms of revenue but it’s a very tough market. Everybody wants to be here. Ultimately I think we’ll see some shaking out.”
Butera’s also optimistic about the revenue that’s going to be generated and thinks that it could even top the high end of most predictions. He adds, “I’ll take the over on $8 billion.”
Morgan Stanley thinks so, as well. While the pragmatic forecast is for the industry to be worth around $8 billion by 2025, the firm believes that it could reach as much as $15 billion if all states were to legalize the activity. There are already 14 states on board, and more are coming on a continuous basis, so the prediction may not be as far off as some may believe.
