The Jefferies Group, after holding a summit on digital gaming, released a report that predicts a market of $38.7 billion for online gaming and sports betting combined, topping a previous prediction of $19 billion.
The report’s revenue split between iGaming and online sports betting was roughly equal, with iGaming slightly ahead of sports betting at $19.2 billion.
“While iGaming is still in the very early stages of market opening and growth, with only New Jersey, Pennsylvania, and Michigan having the complete iGaming offering and Nevada, Delaware, and West Virginia allowing limited iGaming products, we expect legalization to accelerate as states seek new sources of tax revenue,” Jefferies said, according to CDC Gaming Reports.
“We assume states that currently have both land-based casinos and (mobile sports betting) offerings will also develop iGaming. While we assume fewer states will legalize iGaming (24 states versus 45 for sports betting), we expect iGaming could reach at least $19 billion by maturity, although the timing is less certain.”
Jeffries’ report identified good buying opportunities are BetMGM, Rush Street Interactive, and Flutter, the U.K.-based mobile betting company that owns FanDuel.
“BetMGM increased long-term market-share targets at the April investor day,” Jefferies said. “Market-share progress is being made in two notable states and BetMGM is overall the leader in the recently launched Michigan. FanDuel continues to perform in New Jersey. We expect both operators to continue to build and maintain share as markets begin to mature.”
