A popular question since the U.S. Supreme Court struck down the federal sports betting ban: Who will be the winners?
Immediately after the decision, the general business press jumped on casino operators. No doubt, companies with properties in states that adopt sports betting will benefit—Caesars, Boyd, Penn National, MGM Resorts, among them.
However, sports betting is more likely to be a nice plus for casino companies rather than a gamer changer.
The biggest opportunities for investors will be companies that supply sports betting technology and expertise, many which trade in the UK and Sweden.
The biggest are Scientific Games and IGT, both with platforms and technology and the latter with sports betting experience in Italy. And both have signed some nice deals recently.
But Sci Games and IGT are so big that, like the major casino operators, U.S. sports betting is a significant plus, not a game changer. The fate of their stocks still rests more on their giant slots, systems and lottery businesses.
Evidence of that is the stock prices of both companies are down double digits in recent weeks despite U.S. sports betting.
Two likely significant beneficiaries are London-listed bookmakers with long histories in the U.S., William Hill and Paddy Power Betfair.
However, like IGT and Sci Games, these are big companies where what happens elsewhere can outweigh U.S. prospects. For example, the slashing of maximum bet size on gaming machines in UK betting shops will materially affect William Hill, whose stock is down 5 percent since the court decision.
There are other companies where, if stock price is indicative, the answer is heck yeah they will benefit from U.S. sports betting.
Look at the rocket rides of these stocks since the Supreme Court decision:
GAN +85 percent
Kambi +72
GVC + 30
All three companies have been busy signing contracts in the U.S.
GAN will provide its internet and sports betting software to Greenwood Gaming’s Parx Casino outside Philadelphia, and perhaps beyond that as Greenwood is partnering with Cordish Cos. to develop other Pennsylvania casinos.
GAN also is supplying FanDuel, the daily fantasy sports operator recently purchased by Paddy Power Betfair and operating on IGT’s sports betting platform.
In other words, little GAN—with a market cap of just around $73 million—is playing with major league companies, perhaps portending bigger things to come.
Kambi will provide its platform to FanDuel’s larger arch rival, DraftKings, which at this point intends to get into sports betting while remaining an independent company.
Kambi, with a market cap over $600 million, is a pure sports betting technology company small enough for the U.S. to have a major impact.
GVC isn’t small with a market value of around $8.5 billion.
However, GVC stock jumped to a record high when it announced a joint venture with MGM Resorts to develop an online sports betting platform for the US.
Others will benefit from U.S. sports betting. For example, Stockholm-listed Kindred says it has a deal with an unidentified U.S. casino operator under its Unibet brand. With a market value of $270 million, Kindred also is among those small enough that the US can make a big difference.
So, you get the idea. There is investment opportunity in the proliferation of U.S. sports betting, and much of it with companies headquartered elsewhere.
