As the fall sporting season heats up, many are looking forward to placing bets on football, baseball playoffs and the World Series, and other big games.
Sports betting used to happen in the shadows. Illegal sportsbooks, run by shady bookies and criminal organizations, used to operate throughout the country. As of today in the U.S., sports betting is legal at the federal level. However, it is still not legal in every state. 37 states and Washington D.C. have legalized sports betting, and it is an activity enjoyed by many.
It remains illegal in three of the most populous states — Florida, Texas and California. Even when the practice is legal, regulations regarding sports betting vary on a state-by-state basis.
Legalization has allowed a number of public companies to begin bringing sports betting into the mainstream. In 2022, the total sports betting revenue in the U.S. amounted to $7.5 billion, nearly double the amount from just a year prior. Goldman Sachs Group predicts the online sports betting market could reach $39 billion in revenue by 2033.
Simply put, sports betting is gambling that includes placing a wager on the outcome of a sports event. Bets are made through sportsbooks — also known as bookmakers or bookies. Sportsbooks can be found at casinos or betting shops and online. In Nevada alone, there were 126 sportsbooks as of 2021.
The surge in sports betting started during the COVID pandemic when sports fans couldn’t attend live sporting events but could bet on them. It was also aided by smartphone apps that make betting easy.
The largest online sports betting company is Flutter Entertainment (Tii:FLTR), which operates FanDuel. By the end of 2021, the company, which operates sports betting and gaming in the U.S., U.K., Ireland and Australia, estimated its share of online sports betting had grown to about 40%. Flutter also operates in the U.K. and Ireland markets, the largest in Europe, in addition to Australia. DraftKings (Tii:DKNG) owns the second-largest online sportsbook in the U.S. In fact, DraftKings is solely an online sportsbook company.
Brick-and-mortar casino operators are also active online and in their casinos. MGM Resorts (Tii:MGM) is one of the largest casino operators. It also operates online and jointly owns BetMGM with British company Entain. Though its casinos suffered during the pandemic, Las Vegas visitors are returning in droves. Caesars Entertainment (Tii:CZR) operates more than 50 casinos across the U.S. It acquired William Hill to open up the online sportsbook market and rebranded it Caesars Sportsbook. Penn National Gaming (Tii:PENN) has 44 casinos in 20 states and it is active in online sports betting after acquiring a 36% stake in Barstool Sports in 2020 and theScore a year later (Penn has since sold all shares of Barstool Sports).
For retail shareholders, there are a growing number of options to invest in sports betting companies, both those that focus online and those with a brick-and-mortar presence. Let the games begin.