A Jefferies analyst predicts that three British betting stocks are set to soar as the U.S. sports betting market could be worth $5 billion in profits by 2023.
Sports betting has exploded in the U.S. since the Supreme Court lifted a ban on such bets outside of Nevada two years ago. Fourteen states have legal sports betting in operation and seven others have approved it, but have yet to see betting get under way, Bloomberg reported.
The bank’s analysts raised its target price on U.K.-listed trio Flutter Entertainment, formerly Paddy Power Betfair, William Hill and Ladbrokes Coral owner GVC, which they said could double group profits in five years, Barron’s reported.
Flutter Entertainment (FLTR.UK) is the top United Kingdom betting company that controls FanDuel, the main online U.S. sports wagering rival for DraftKings.
Flutter, which also has U.S.-listed shares traded under the ticker PDYPY, is a more diluted play. It is diversified globally and plans to merge with the Stars Group (TSG), the owner of PokerStars and the leader in online poker globally, to form a $16 billion market value company.
Two other U.K. sports wagering companies, William Hill PLC (WMH.UK) and GVC Holdings (GVC.UK), have staked out claims in the U.S., which is seen by the industry as one of the largest global opportunities, Barron's has explained.
Jefferies predicted gross gaming yield of $19 billion from the U.S. market by 2023, equivalent to a $5 billion Ebitda opportunity.
Casinos and betting operators have been cutting deals with sports leagues and media companies in a bid to reach a larger audience. Fox Corp. last year created an online betting platform with the parent of PokerStars, while regional casino operator Penn National Gaming Inc. bought a stake in Barstool Sports, the sports blogger and podcaster, last month.
Sports betting is also expected to play a role in the National Football League negotiations for new broadcast contracts, with the league asking potential media partners to identify their strategy for the online wagering industry.
To be sure, CBS recently said it will make William Hill its exclusive online sports betting and data provider as the worlds of media and gambling continue to converge.
Under the partnership, which begins in March, the broadcaster will feature William Hill’s odds, experts and programming on CBS Sports websites and apps. William Hill data will also appear on the CBS TV network, Bloomberg reported.
William Hill, a London-based bookmaker that dates back to 1934, has been increasing its presence in the U.S. It operates 146 sports wagering facilities, from the Stratosphere in Las Vegas to the Tropicana in Atlantic City, New Jersey. CBS is the broadcast division of ViacomCBS Inc.
© 2024 Newsmax Finance. All rights reserved.