Currently, sports betting is prohibited in the US under the Professional and Amateur Sports Protection Act of 1992 (PASPA).
The Act effectively outlawed sports betting on the territory of the country, except for the sports lotteries which have been allowed in the states of Delaware, Oregon and Montana. To date, Nevada is also one of the states which feature licensed sports pools.
Sports Betting Legalization Attempts
At the end of June 2017, the US Supreme Court gave the green light to a hearing challenged by the state of New Jersey on sports betting. A group of state’s officials, headed by Governor Chris Christie, started an appeal as part of their attempt to make sports betting legal in New Jersey.
Governor Christie’s lobby tried to legalize sports betting in New Jersey before, by making two previous legislative attempts, in 2012 and 2014, respectively. According to the supporters of sports betting legalization, such a step could turn out to be beneficial for the economy of the state of New Jersey, despite the fact that some members of President Trump’s administration urged the US Supreme Court not to allow such a hearing.
The hearing is scheduled to take place in November, with a tentative vote is set for the late spring or early summer of 2018. According to proponents of the sports betting legislation, there is a chance that the Supreme Court decides to remove the ban as unconstitutional.
Currently, the only US state that allows single-game sports betting is Nevada. According to research, local sportsbooks brought to the state $4.5 billion in bets over the past year. This September, the Major League Baseball’s executives met in Las Vegas to initiate some negotiations with sportsbook operators about the ways the industry works.
Sports Betting Market Potential
According to research carried out by GamblingCompliance’s analysts, gross gaming product (GGR) of approximately $5.8 billion is to be generated in case that sports betting is made legal across the US. The company announced the finding as part of a report which has been prepared ahead of the Clarion Gaming-oraganized Sports Betting USA Conference, which is to take place in New York in the middle of November.
According to data provided by the American Gaming Association, local citizens wager on illegal sports gaming no less than $150 billion every year. In comparison, currently, Canadian gambling legislation also suspends sports betting. Such bans, however, have pushed many US and Canadian players to bypass legislative restrictions by placing bets with off-shore online sports betting operators.
According to recent survey, the National Football League’s ratings fell by 14% over the first two weeks of the 2017 season. What is worse, this seems like a continuous trend that started in 2016. At the time when the decline was reported last year, the US Elections were blamed for the low ratings as they were offsetting the viewers’ attention. On the other hand, a number of states across the country have been considering whether to constitute Daily Fantasy Sports as sports gambling, or not.
How Could Sports Betting Legalization Affect The Stars Group?
At the beginning of August, the online gambling giant Amaya Inc. revealed that the process of re-branding had been successfully finalized, so its corporate name was officially changed to The Stars Group Inc. In addition, the Canadian online gambling operator also moved its headquarters from Montreal to Toronto.
Apart from operating the PokerStars and Full Tilt poker brands, the company also runs online casinos, sportsbooks, slot machines and lotteries.
Then, at the beginning of September, The Stars Group provided its adjusted annual forecast for 2017 and announced increased expectations for its revenues and earnings. According to the results which the online gambling behemoth reported for the second quarter of the year, there was a 6.8% increase in comparison to the revenues it reported over the second three months of 2016. In addition, a massive surge in casino and sportsbook revenues was registered, with them increasing by 50.2% year-over-year over the second quarter, reaching a result of $89.6 million.
At the time when the Group adjusted its forecast for the full 2017, the company’s stock rose by 10%, with its shared having increased a 26% increase this year. What is more, the Supreme Court decision whether to give the green light to the legalization of sports betting could see even a better performance of the company, meaning that its shares could rise even more in 2018.
The increasing interest in fantasy leagues and the rapid growth of sports betting, along with the decline reported in the ratings of the National Football League and other major leagues could mean that The Starts Group and other large gambling operators in the US and Canada could become more oriented towards the sports betting and daily fantasy sports market any time soon.
Despite the fact that the issues related to the legalization of sports betting and Daily Fantasy Sports are still considered controversial and their future is yet unclear, lifting the ban on these operations could end up redirecting a massive amount of cash that is currently being spent with foreign betting operators to the local industry, hence the local gambling companies.
Whatever it happens, the legalization of sports betting in the US will undoubtedly change the gambling and sports betting landscape of the country, with gambling companies also being affected. The Stars Group would surely be positioned as one of the leading companies in the online sports betting industry and would benefit from the market’s potential.