The Supreme Court’s decision last week to strike down The Professional and Amateur Sports Protection Act, a law which made sports betting illegal across much of the U.S, has triggered a veritable gold rush in the sports betting world. Deals both minor (Metric Gaming partnering with Nektan) and major (Paddy Power Betfair buying FanDuel) have quickly been executed in the wake of the landmark decision, which will now put the power to legalize sports betting in the hands of individual states.
Estimates vary widely as to the potential size that the legal sports betting market could reach, with figures ranging anywhere from $50 billion to $400 billion. The current illegal market is estimated to be a $150 billion one, and while it seems unlikely that a legal market wouldn’t be able to at least eclipse that, it’s not a given that every state will automatically legalize sports betting, though there will seemingly be little reason not to thanks to the tax revenue it will generate (pegged at between $50 million and $100 million annually in New Jersey).
Regardless of what the market size ends up being, it’s going to be huge where there was essentially nothing just days ago. Meanwhile, sports betting-related stocks have posted solid but hardly spectacular gains since the ruling, despite the enormous growth potential they now have. While the competition over the U.S sports betting market will be fierce, we’ve identified three companies that are positioned to benefit from it the most. We’ll take a look at those stocks below.
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Churchill Downs, Inc. (NASDAQ:CHDN)
Churchill Downs, Inc. (NASDAQ:CHDN) is another company that quickly capitalized on the sports betting opportunity, entering into a partnership with Golden Nugget Atlantic City to provide the casino resort with its iGaming and sports betting products. New Jersey is expected to be the first state to legalize sports betting outside of Nevada, with a Legislature vote on the matter planned for June 7, so Churchill Downs should see money from the venture begin to roll in almost immediately.
Churchill Downs, Inc. (NASDAQ:CHDN) is also well positioned for U.S sports betting on the mobile and online fronts, owning the largest legal wagering platform in the country, TwinSpires.com. Churchill Downs should have little trouble expanding the platform beyond bets on horse racing to allow for wagers on sports matches.
On the next page we’ll look at two other stocks that look like big winners as legal sports betting sweeps across the U.S.