How Online Gambling Has Impacted Wall Street


Millions of Americans and billions of people globally – love to gamble, especially on sports. The sports betting market is generating over 70% of global gaming revenue: which is more than casinos, poker, lottery, and any alternative form of gaming combined.

The sports betting market in 2017 was valued around $104 billion, and sports wagering overall is predicted to exceed $155 billion within the next five years. Amid the coronavirus pandemic, casinos and venues that offered live wagering assisted a shift from gambling in public to the convenience of online gambling at home.

In 2020, sportsbooks in NJ dropped 68% in the month of April, and with New Jersey and New York sports betting receiving a considerable boost towards legality in recent years, it isn’t easy to not believe a more decisive move towards online activity will continue to expand.

Countless casino companies are investing their interest and assets in the sports betting world. To support the growing trend, the blue-chip S&P 500 index has taken a gamble that it’s here to stay. Casino company Penn National Gaming holds a significant stake in Barstool Sports, the sports betting establishment owned by Dave Portnoy, entered the S&P 500 this year. In addition, Caesars Entertainment purchased the UK-based sports betting giant William Hill for $4 billion, also entering the S&P 500. They joined rival S&P 500 members Sands, Wynn Resorts, and MGM Resorts.

The stay-at-home lifestyle we faced in 2020 has resulted in a massive shift in the habits of players,” said FansUnite CEO Darius Eghdami. “Players that are used to going to the physical casino or the horse track have found solace in online gambling.”

FansUnite delivers a unique online interface and is an industry leader that has benefited from the switch in consumer behavior as a result of the Covid-19 pandemic. The worldwide online gambling market was $53 billion in 2019. But the Covid-19 age is showing potential trajectories that online gambling’s growth rate could increase annually at 11.5% between 2020 and 2027.

The US economy is unquestionably changing; evidence of this points towards the removal of Xerox from the S&P 500 to create space for casino companies.

In general, Las Vegas and the United States have seen a considerable slump in travel due to the Covid-19 pandemic. The reaction to this saw multiple casino companies open online sportsbooks after the Supreme Court ruling in 2018 legalized sports gambling in states that wanted to pursue it.

Since then, over two dozen states have legalized sports wagering. A key reason why casino stocks have struck gold over the past year, even though blackjack, roulette, and casino tables have been significantly empty.

Traders are taking a gamble on a significant travel rebound as more states and cities begin to open completely – and with continued strong demand from online betting enthusiasts placing wagers on their phones through apps like Barstool Sportsbook or their favorite casino.

Penn National shares, which owns a 36% stake in Barstool and close to four dozen racetracks and casinos in Nevada, Missouri, Mississippi, Louisiana, and several other states, has watched a 1,300% growth in the previous year.

Caesars’ stock has skyrocketed to 1,000% since March 2020, with MGM and Wynn also gaining traction in their stocks as they’ve doubled in the past twelve months.

MGM, in particular, has ramped up their sports gambling operations in 2021. The company operates BetMGM online sportsbook and has a significant associate in Barry Diller. The media and e-commerce tycoon IAC firm purchased a $1 billion stake in MGM last year.

Investors have also been drawn to the pure-play online sports betting enterprises that have flourished in the past year as gamblers can now bet legally on basketball, football, and a wide array of professional and college team sports.

DraftKings began trading last April, and since their merger with a blank check special purpose acquisition company, they’re up more than 300%. Flutter Entertainment, which owns the rival of DraftKings, FanDuel, are also up around 200%.

The sports gambling and gaming market is undoubtedly crowded, but it appears the demand is allowing room for multiple players. Morningstar, an investment research firm, estimates that legal sports bets will reach $81 billion by 2024.

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