Multiple states are accelerating their plans to make sports betting available to the public as football season – considered to be the most lucrative time of year for sports betting companies – rapidly approaches. DraftKings and Penn National Gaming are preparing for a strong second half, making some notable acquisitions to expand their offerings and develop online gaming technology.
Both companies continue to move into new markets and expand partnerships with professional sports leagues as the broader outlook for nationwide sports betting legalization seems to improve every month.
Related ETF & Stocks: Roundhill Sports Betting and iGaming ETF (BETZ), DraftKings, Inc. (DKNG), Penn National Gaming, Inc. (PENN)
Legalization Heats Up Before Football Season
The acceleration of sports betting legalization, coupled with casinos re-opening after being shutdown last year, caused nationwide gambling revenues to surge in recent months. American Gaming Association President and CEO Bill Miller announced that combined gaming revenues, which includes sports betting, mobile gaming, table games and slots, climbed to $13.6 billion across the country, in the most recent quarter, a new record.
As the Boston Herald highlights, commercial gaming generated nearly $25 billion in revenue through the first half of the year, already closing in on 2020’s full year revenues, and putting it on pace to surpass 2019’s record of $44 billion.
Since the Supreme Court overturned a federal law that banned sports betting three years ago, at least 20 states allow some form of legalized sports gambling, while more than a dozen offer online sports betting. The rush of states pushing to legalize sports betting in some form has boosted sports gaming revenues nearly 650% since the second quarter of 2019.
MRP has recently highlighted a handful of state markets positioning themselves to expand sports betting before football season, including Arizona, Ohio and Maryland. In addition to those markets, other states are aiming to fully legalize sports wagers either before or during football season, capitalizing on what is widely considered to be the most lucrative time of year for sports betting companies.
Connecticut is preparing to launch legal sports betting this fall, with a target date of September 6, 2021. Per Action Network, sports betting giants FanDuel and DraftKings have struck deals with Connecticut’s Mohegan Tribe and the Mashantucket Pequot Tribe, respectively. Similarly, the Connecticut Lottery, the third and final legal book allowed to operate in the state, just announced they have decided on a sports betting vendor to be announced later this week.
Regulatory approval of these new deals can take weeks in some cases, which may mean sportsbooks won’t be fully operational until after the NFL season opener on September 9, 2021. However, once state and federal regulators sign off on these deals, both retail and mobile sportsbooks will be up and running in time to capture most, if not all of this year’s football season.
Smaller markets, including Wyoming and South Dakota, are also on track to launch legal sports wagering in early September, according to Legal Sports Report. Odds are continually improving for gambling legalization in other states as well, including North Carolina and Louisiana, both of which are pushing for some form of legal betting during this year’s football season.
In total, there are at least six new states that could have fully operational retail and online sportsbooks by mid-September, and with gaming revenues shattering records in the second quarter, its likely more states follow suit.
Sportsbooks Making Key Acquisitions
Bloomberg recently wrote that the revenue of the top five global sports betting companies has tripled, driven by 70% growth in industry revenue and an 80% increase in concentration. Two of the largest online sportsbooks, Penn National Gaming Inc. (PENN) and DraftKings (DKNG) recently made headlines by announcing some major acquisitions to better position themselves in the rapidly growing market…
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