The market for legal sports betting could range between $1.2 billion and $57.6 billion of total wagers, with proceeds for gaming operators between $62 million and $2.9 billion.
With the U.S. Supreme Court paving the way for U.S. states to legalize sports betting, shares of gaming and casino companies, led by Scientific Games Corp, saw an upward surge with investors eyeing new business opportunities for the industry.
The Supreme Court ruling essentially struck down a 1992 federal law which widely prohibit the practice and endorsed New Jersey’s bid to allow sports betting.
The development increases the likelihood that legal sports betting is set to go nationwide, rather than be confined in places such as Las Vegas and Nevada.
The illegal sports betting market is worth billions of dollars annually.
According to Todd Eilers, an analyst at Eilers & Krejcik Gaming, Scientific Games is particularly well placed to benefit from the ruling due to its acquisition of NYX Gaming Group Ltd in January 2018.
NYX is a Canadian digital gaming and sports betting firm.
“I’d say there’s a lot of states that would move forward with sports betting,” said Eilers. “Any regional casino operator with a lot of casinos across a lot of states would be the best positioned,” he added.
Shares of Scientific Games touched their all time high at $59.53 and saw trading volume 4.6 times the 10-day moving average.
Shares of International Game Technology were also up by 3.4% and were to track to register their biggest one-day percentage gain since early March.
Shares of Churchill Downs also hit their all-time high of $294.41 with trading volume 2.9 times the 10-day moving average.
As per a research note prepapred by David Katz, an analyst at Jefferies, the market for legal sports betting could range between $1.2 billion and $57.6 billion of total wagers, with proceeds for gaming operators between $62 million and $2.9 billion.
Although, negotiating regulations and issuing licenses are likely to be time consuming affairs and could push earning further than some investors might expect.