Posted: July 21, 2021, 10:46 p.m.
Last update on: July 21, 2021, 11:04 a.m.
While only 15 states and Washington, DC currently allow online sports betting (OSB), the growth trail is long, notes ARK Investment Management.
Renowned New York-based fund issuer and fund manager founded by Cathie Wood is the latest company to highlight the exponential growth trajectory of online and mobile betting in the United States, noting the 2018 Supreme Court ruling The Professional and Amateur Sports Protection Act (PAPSA) is a boon to states like New Jersey.
Since legalizing online sports betting in mid-2018, for example, New Jersey has seen its online revenue soar to $ 15 billion, half of which took place in 2020, ”he said. ARK analyst Nicholas Grous said in a new report. “Today, 90% of all bets in the state are placed online.”
Today, New Jersey is America’s hub for iGaming and sports betting, with the state rivaling Nevada in terms of total sports betting volume. Grous notes, based on its $ 15 billion grip, that New Jersey has likely generated $ 115 million in tax revenue in recent years from sports betting. The analyst believes other states can replicate this success.
Other states also benefiting from OSB panels
Due to convenience, entertainment value, and higher margins, gaming operators are forced to expand their online sports betting platforms.
Data confirms that some are doing just that with FanDuel, a unit of Flutter Entertainment (OTC: PDYPY), controlling about half of the US online betting market, by some estimates. The more states there are, the more easily bettors can adopt the possibilities of sports betting on the Internet and on mobile, and the possibilities of tax collection increase, as do the income opportunities of operators. It appears that some states are receiving this memo.
“As of summer 2020, for example, the percentage of mobile or online sports betting handles in Pennsylvania, Illinois and Indiana has been 75% or more,” ARK’s Grous said.
He notes that Nevada, which maintains pesky in-person registration requirements for mobile betting, sees about 50% of sports bets placed online. In addition to New Jersey, Colorado is another shining example of a direct shift to mobile betting. Colorado did, and in just over a year since legalization, it’s one of the fastest growing sports betting markets in the country.
ARK sees a great opportunity
Like many other research companies, ARK is bullish on sports betting. But his handle and his earnings forecast are something to behold.
“According to our research, over the next five years, as the number of online sports betting increases tenfold from around $ 18 billion to $ 180 billion, the three main categories of sports betting combined could generate revenue growth of 31% at a compound annual rate, growing the online sports betting category from $ 9.5 billion last year to $ 37 billion in 2025, ”said Grous.
The three categories of sports betting are defined as traditional sports betting, electronic sports and fantasy sports. ARK estimates that $ 18 billion of the planned $ 37 billion will come from standard sports betting.
Related stocks currently held by ARK Investment Management include DraftKings (NASDAQ: DKNG) and Skillz (NYSE: SKLZ). Wood is among the largest institutional investors in these two stocks.