- There's a rush by investors into sports betting stocks ahead of state-by-state legalization.
- States that could have sports betting up and running by the NFL season could include New Jersey, Pennsylvania, West Virginia, Mississippi, New York and Delaware. Efforts are also percolating in California, Illinois, Missouri, Rhode Island, South Carolina, Massachusetts and Michigan but face some political bumps that could push legalization out until the early part of 2019 (in time for the Super Bowl?).
- Union Gaming's John DeCree calls Scientific Games (NASDAQ:SGMS) the best way for investors to play the sports betting explosion. The Stars Group (NASDAQ:TSG) is also seen benefiting if online and mobile betting is approved by states. As for land-based casinos, Union sees Caesar Entertainment (NASDAQ:CZR) as an early winner due to its New Jersey exposure. Penn National Gaming (NASDAQ:PENN), Eldorado Resorts (NASDAQ:ERI), Boyd Gaming (NYSE:BYD) and MGM Resorts (NYSE:MGM) are also set up for a sports betting windfall.
- DeCree thinks concerns over diminished traffic to Las Vegas may be overstated. "Visitors come to Las Vegas for an array of entertainment and leisure options, not just sports betting," he notes. "Sure major sporting events like Super Bowl and March Madness draw significant sports tourism, but we find it hard to believe that even with sports betting that any other jurisdiction will be able to emulate the overall Las Vegas experience," he adds.
- Stifel Nicolaus is sitting out the rush to jump into U.S.-based sports betting stocks, noting that William Hill (OTCPK:WIMHF, OTCPK:WIMHY), Paddy Power (OTC:PDYPF) and Ladbrokes (OTCPK:LDBKF, OTCPK:LDCOY) could see some outsourcing from regional players.
- TSG is up 1.51% premarket and SGMS is 2.05% higher to follow on strong gains yesterday.