March 16, 2022
No matter how you consume your media, you’re likely inundated with online gambling advertisements. Gaming companies are pouring millions into marketing and advertising to capture market share from competitors as more states legalize online gambling and the industry continues its expansion.
Online sports betting is legal in 19 U.S. states – with more in the works. According to Grand View Research, a market research and consulting company, the online gambling market is expected to generate $127 billion annually by 2027. That represents a compound annual growth rate of 11.5% from 2020 to 2027. Here’s a look at five publicly traded companies competing for a bigger share of that massive market.
In addition to providing a sports betting platform, Boston-based DraftKings Inc. (Tii:DKNG) also offers fantasy sports-related contests. Specifically, the platform enables users to enter fantasy-like contests in major sports leagues and the Canadian Football League (CFL), XFL, and Premier League. Founded in 2012, DraftKings now has professional partnerships with Major League Baseball and the National Football League. For the fourth quarter ended December 31, 2021, DraftKings reported revenue of $473 million, an increase of 47% compared to $322 million during the same period in 2020. Monthly Unique Payers during the quarter increased by 32%, and Average Revenue Per Monthly Unique Payer grew by 19%.
As the parent company of FanDuel and Betfair, Dublin, Ireland-based Flutter Entertainment plc (Tii:PDYPF) operates some of the world’s largest online betting platforms. In addition, the company, which acquired British online bingo company Tombola Ltd. in January, owns the Fox Bet, Paddy Power, Pokerstars, and Sky Bet brands. All told, Flutter has an average of 7.6 million monthly players. As with others in this space, Flutter benefits from the massive uptick in online gaming. For 2021, revenues grew 37% year over year on a 23% increase in average monthly players.
Though Las Vegas isn’t the only place where gambling and sports betting are now legal, it shouldn’t surprise you to see some of the names synonymous with Sin City making their way into the world of online gambling. Caesars Entertainment, Inc. (Tii:CZR) is one of them. Last year the casino operator sold its London-based William Hill sportsbook brand and invested $1 billion in digital tech to facilitate a robust online gambling presence. Earlier this month, Caesars launched a new horse racing wagering app, Caesars Racebook, in conjunction with the official online wagering platform of the New York Racing Association.
Another name synonymous with Las Vegas, MGM Resorts International (Tii:MGM) launched its BetMGM platform in 2028. Since then, it’s grown to become the world’s No. 3 player in the online gaming marketplace. BetMGM also reached a multi-year marketing partnership with Madison Square Garden Sports to become an official sports gaming sponsor for the New York Knicks of the NBA and New York Rangers of the NHL. BetMGM continues to expand its sports betting platforms to new states, launching its mobile app in Illinois earlier this month.
Esports or competitive gaming has become increasingly popular, even selling out major sporting arenas pre-pandemic. Last year, the global competitive-gaming sector grew 14.5% to generate just over $1 billion, according to research group Newzoo. The games market insights and analytics provider also predicts that esports revenue could almost double to $1.8 billion this year. With esports competitions remaining wildly popular, it’s unsurprising that there would be a market for wagering on their outcomes. Esports Entertainment Group, Inc. (Tii:GMBL), a full-stack esports and online gambling company, was launched to fill that market demand. The company also has partnerships with traditional pro sporting leagues like NFL/NHL/NBA/FIFA teams.
The New York Times reported that online bettors placed $2.4 billion in wagers in New York within just five weeks of the state legalizing online gambling. With more states likely to get on board the mobile gaming bandwagon in the coming months, those companies that invested in digital platforms bet on a sure-fire winner.