On May 14th this year, a landmark ruling by the U.S. Supreme Court changed the landscape for online betting and sports betting providers forever more. On that day, the court struck down the 1992 federal law that prohibited sports gambling in all but four states, starting a gambling gold rush. And state authorities and businesses alike are now tripping over themselves to take advantage of this somewhat unexpected windfall.
Who are the winners?
For many, especially gamblers, the ruling was long overdue, and they can now enjoy betting on sporting events without running the risk of breaking the law. In fact, the only people who will not benefit from the ruling are the underground bookmakers who will either have to become legally licensed or retire from the industry.
And while some may argue that the state governments who now stand to land billion-dollar tax windfalls are the real winners, online gambling providers are already starting to see some positive returns without so much as lifting a finger. In fact, on the day of the ruling, many top players in the industry enjoyed a spike in their share price. One prime example is 888Poker, who went from 270 pence per share to 312 pence per share on the London Stock Exchange.
Who will move first?
The sudden interest in online gambling providers is understandable as it is they who are best poised to step into the market and offer sports fans the most convenient betting options. Brands such as 888Poker have been in the industry for decades, and many have built solid reputations as the go-to providers for online poker and casino games. And with the rise in popularity of poker in recent months, the profiles of these online betting providers are at an all-time high.
So, when legalized sports betting takes a firm hold, it’s likely that it will be these trusted names and brands that the average fan will turn to. Is it no wonder that their share prices enjoyed such an increase following the Supreme Court’s judgment?
At current, the illegal sports betting industry is worth a reported $150 billion each year. That’s an astronomical figure, especially when combined with the legal sports books operating out of states such as Nevada. With such incredible sums bet on sporting events throughout the year, investors are now eager to get a piece of the action so to speak.
The mad dash to invest saw gaming stocks hit an all-time high for sports betting operators, and there are now concrete plans for some to invest in New Jersey, in particular. The state was pivotal in seeing the ruling as it was its argument that the federal law infringed on a state’s sovereignty that finally swayed the Supreme Court.
The law was struck down with a vote of 6-3 and now, several states, including Connecticut, Mississippi, New York, Pennsylvania and West Virginia as well as New Jersey are all poised to act. Currently, each of these states has laws in place that will allow them to transition to legalized sports betting in little time.
Not Everyone is Happy
Unfortunately, when laws like these are struck down, not everyone is happy, and this is true where this law is concerned. Sports betting in the U.S. is a hot topic with many of the mindset that things are best left as they are. The National Football League, Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association all stood against New Jersey’s argument.
The various associations argue that the ruling puts their players at risk, but the fact is that regulated betting on professional sports has been legal in many countries for a long time. It seems that the NFL et al. want to retain as much control of their leagues as possible, which is understandable. They fear that sports betting providers and the industry will become as lucrative if not more so than the sports themselves.
But the reality is that legalized sports betting will likely do more good for the various leagues and competitions than not, at least from a business standpoint. Broadcasters such as ESPN will more than likely see a spike in viewer ratings as fans will have a more vested interest in games of teams they support. And higher ratings mean more money for commercials, which means more money for the various sports associations when the time comes to renew TV rights deals.
Regardless of their worries and the vocal opposition they have made against the ruling, the sports’ stances on sports betting have had little effect on share prices or the opinion of the average fan. The ruling has been a long time coming, and now that it is here, fans are happy about it. It is unclear how the president views the ruling, but given his stance on everything from North Korea’s nuclear capabilities to Amazon’s unfair business advantages, there’s no doubt that whichever side he comes down on, he’ll come down hard.
So, what’s next?
As we mentioned earlier, those five states along with New Jersey are ready to get the ball rolling sooner rather than later. And once they get underway, the floodgates will open, and other states will soon follow. At that point, you can expect to see the share prices of betting providers soar as fans take full advantage of their newfound freedom.
It is also likely that we’ll see a few sports stats providers jumping into the market. These sites such as DraftKings would seem to be the perfect platform for sports betting, but as of yet, there have been no announcements. In fact, DraftKings has poured cold water on the topic by insisting that they will monitor the market before diving in.
Whatever happens in the coming months, there’s no doubt that the Supreme Court ruling will have a massive effect on the gambling industry stateside. Share prices will likely skyrocket for a time as the new laws take hold, and the industry will enjoy a boom. If ever there was a time to invest in an online betting provider, it’s probably now.