The six states currently operating sports books in the legal U.S. market generated combined wagering of nearly $1 billion in November. But that’s just a drop in the bucket compared with the $3 billion to $5 billion a year that Fitch Ratings Service believes will accrue to casinos, racetracks and bookmakers as more states jump on the regulation bandwagon.
In terms of handle, Nevada had its best single betting month ever, with $581.1 million; New Jersey had $330 million; Mississippi $45 million; Delaware $16 million; West Virginia $12 million; and Pennsylvania’s first two weeks generated $1.4 million.
It works out to a cool $985.4 million, not counting New Mexico, where one Indian casino has opened a sports book, or the first few days of betting in Rhode Island, or the District of Columbia, which is allowing its lottery to take bets.
Fitch expects this continued growth to exert a decided “knock-on” benefit for a range of casino revenue drivers, including slot machines, table games and the full range of non-gaming attractions.
“The proliferation of legal sports betting in the U.S. is a net positive for gaming operators,” Fitch analyst Alex Bumazhny wrote in a new report, “What Investors Want to Know: U.S. Sports Betting”.
“It provides some incremental direct revenue and another attraction to draw customers into the casino as younger customers might be less interested in slots than their older counterparts.”
Gaming equipment suppliers should also benefit, he said, with their ability to provide the industry with one-stop technology shopping. The two largest, Scientific Games and International Game Technology, have already acquired or developed sports betting platforms, he noted.
Of the states that have legalized since the U.S. Supreme Court in May voted to strike down a longstanding federal ban on the industry, New Jersey has seen the most action. Through November, the state’s casinos and racetracks have booked $928.1 million in sports wagers and collected $73.2 million in revenues, according to the New Jersey Division of Gaming Enforcement.
Such success hasn’t hurt Nevada either. Through November, the Silver State has booked more than $256 million in sports betting revenue on more than $4.4 billion in wagers.
The report forecasts that another 10 to 19 states could join the party this year. Several have already pre-filed regulatory bills, the report notes, including Kentucky, Missouri, Ohio, Tennessee and Virginia.
Of these, New York, which also appears likely to legalize this year, would represent the most “meaningful potential market,” in Bumazhny’s view, with a capability to almost double current nationwide revenue projections.
