NEW YORK (AP) - Investors and sports betting companies are running up the score when it comes to sports betting, predicting the fast-growing industry will be a $7 billion to $8 billion business in the U.S. within five years.
But not all the many companies flocking to get in on the ground floor will make it, they predict.
Panelists at the NYC Sports Betting Investor Summit said Monday that the industry is growing quickly in this country a year and a half after New Jersey won a U.S. Supreme Court ruling clearing the way for all 50 states to offer legal sports betting.
So far, 14 do, and many others are considering it.
Investment firm Morgan Stanley predicts the U.S. market will generate almost $7 billion in revenue by 2025, up from $833 million this year. That’s up from an estimate of $5 billion the company had issued less than a year ago.
That amount would represent less than 20% of the $41.7 billion won by commercial casinos in the U.S. in 2018. Still, it represents a substantial new revenue stream that, for legal operators, did not exist a year and a half ago.
At the investors event sponsored by Morgan Stanley, executives from MGM Resorts, Hard Rock and Mohegan Sun all issued similar predictions in the $6 billion to $8 billion range. And the research firm Eilers & Krejcik Gaming, which tracks sports betting regulation and revenue, said those figures are “very close” to its own estimates of future market size.
Participants at the forum cautioned that while the industry is growing quickly, the high cost of acquiring customers and promoting a new business could lead to some current operators failing.
“It’s war out there,” said Seth Young, chief information officer for PointsBet. “At the end of the day there’s going to be a lot of carcasses out there on the road.”
“It is a growing market here in terms of revenue but it’s a very tough market,” added Scott Butera, president of interacting gaming for MGM Resorts International.” Everybody wants to be here Ultimately I think we’ll see some shaking out.”
Nonetheless, Butera said he believes U.S. sports betting will exceed even the increased figures cited at Monday’s forum.
“I’ll take the over on $8 billion,” he said.
Morgan Stanley gave a high-end bullish estimate that sports betting could generate $15 billion in revenue by 2025 if every state in the nation has legalized it by then. Its worst-case estimate is a $2.5 billion market with only 22 states participating.
Panelists predicted as many as 10 new operators may soon join the market.
Operators continue to spend heavily to attract new customers, who in turn still must jump through several hurdles to deposit funds in their accounts as many major credit cards will not finance gambling transactions. Kresmir Spajic, senior vice president of online gaming and sports betting for Hard Rock International, said 80% of sports betting transactions in Europe are financed using credit cards, compared with about 30% in the U.S.
Even as the conference was underway, numerous sports betting transactions and partnerships were being announced around the country.
The National Basketball Association and DraftKings announced a multiyear partnership that will make DraftKings an authorized sports betting operator of the league. And BetIndiana and Sportradar, the provider of sports data and content, inked a partnership to bring Sportradar’s real-time sports data and managed trading services to BetIndiana’s mobile sportsbook.
Follow Wayne Parry at http://twitter.com/WayneParryAC
Copyright © 2022 The Washington Times, LLC.