Morgan Stanley investment bank is a believer in domestic sports betting in the US and has amended its Industry Revenue Projections from $5 billion to $7 billion by 2025, topping the June 2018 and December 2018 forecast by 40%.
Despite a slower than anticipated pace of legalization of sports betting, Wall Street’s bullish expectations come with only 14 states having moved toward legalization. Optimistic projections have a total of 36 States taking Sports Wagers by 2025 including Illinois, Montana, New Hampshire, North Carolina, Tennessee, and Washington, D.C which are in various stages of their rollout.
MGM’s president of interactive gaming, Scott Butera, speaking after the NYC sports Betting Investor Summit on November 11 went one step further saying “I’ll take the over on $8 billion” in regards to the amended forecasts.
So Why the Forecast Bump?
One simple explanation comes from the fact that Morgan Stanley’s first data report failed to combine Casinos’ online and land-based revenues. Brick and mortar facilities immediately add $1.5 billion to the $5 billion expected from Online wagering.
Also, there’s the fact that many more States including the three most populated, California, Texas, and Florida are still way away from legalization with California the likeliest to join the fray in the next few years.
With data already received from the States that have already legalized and a few outside factors that they now include, forecasters are expecting the sports betting industry to exceed predictions they had less than a year ago.
Is the Optimism Warranted?
Absolutely! Huge markets could open up sooner than later. In California, sports wagering is rumored to be in consideration for the 2020 ballot. Adding California’s population to the fold would dramatically increase revenues.
Potential redistributed bets from the UK and Australia to American Sports is also a factor in the forecasted bump in domestic online sports betting revenues. The Morgan Stanley report hasn’t included those numbers yet but has incorporated the potential for overseas bettors into their bullish projection.
Could the Domestic Sports Betting Industry Beat the Already Amended Projections?
For sure! Morgan Stanley’s Research Report is based on 36 States legalizing Sports Betting. If all 50 States were to sign on by 2025, analysts feel that the market could double to become a $15 billion industry! Some States are close to coming online while others such as Texas seem further away at this time.
Domestic Sports Betting in the US is here to stay and in the words of Scott Butera "It is a growing market… Everybody wants to be here."
With more states legalizing, the path forward for Sports Betting in every state seems more and more inevitable. Blueprints for legalization have been drawn and will be copied by States who have not yet joined the 14 already online.
It’s been 18 months since the Supreme Court to give back control to the states. Revenue growth has been exponential so far with little reason to think it won’t continue.