Sports betting outside Nevada was legalized in May 2018 when the supreme court declared a 1992 law was unconstitutional. The NYTimes estimatres that over $150bln was wagered last year illegaly. So, now that sports betting is legal, the bulk of those illegal wagers should migrate to regulated platforms, like the casino/gaming companies.
MGM has deals with MLB, NHL, NBA CZR has a deal with the NFL
What are the best plays in the space? Sports betting could bring more than 5bln of additional profit per year to the industry...and that is a low end estimate.
Imagine if every major sports stadium had betting windows, like the horse racing tracks do...the gaming revenues could be 5x the initial estimates (total conjecture, but not out of the realm of possibility).
Late 2018 CZR rejected merger attempts by both MGM and Golden Nugget (i'm guessing because CZR mgmt thinks the stock is undervalued, and they don't want to sell during a weak moment for the stock price).
If sports betting really does increase the profitability for the industry (and CZR specifically) then CZR is undervalued. However, if CZR and MGM can dominate professional sports betting, then a merger would make sense (for the right price of course).
Also, what about the online gambling companies...will they take a significant piece of the action? Or will the physical presence of CZR and MGM at the onsite locations be the dominating factor (just a guess).
Carl Icahn recently took a position in CZR, as the stock had been battered down pretty hard (too much debt for the equity & revenue on the balance sheet).
thoughts?
Hi faceslappingcompilation, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
If those topics were completely useless, don't blame me, blame my programmers...
None of you iBanking genius types have any ideas or input for this?
How about using this as a case study...give me you best thoughts/analysis.
You might want to start by spelling the company name correctly . . .
is that really the best you can do?
Dont believe MGM actually made an offer
The Fertitta offer was a joke
No one is going to do your homework for you. Best of luck passing your into to investments course.
you misunderstand my position...i'm a prop trader...i trade the US yield curve, and futures contracts (mostly ES, GC, CL and some FX...JPY, EUR, GBP, plus the entire treasury curve, obvi)...but i don't trade single name stocks...and am curious about the revenue potential of sports betting for the gaming industry...and publicly traded stocks in particular, after reading some articles on legalization of sportsbetting.
Some examples https://investorplace.com/2018/07/3-sports-gambling-stocks-bet-house/</a">https://investorplace.com/2018/07/3-sports-gambling-stocks-bet-house/ https://www.marketwatch.com/story/heres-a-new-opportunity-for-investors…</a">https://www.marketwatch.com/story/heres-a-new-opportunity-for-investors… https://www.fool.com/investing/2018/09/08/will-sports-betting-drive-gam…</a">https://www.fool.com/investing/2018/09/08/will-sports-betting-drive-gam…
The deals made so far between MGM and CZR with the NFL, NBA, MLB and NHL are all for marketing and logo usage...but not for actual sports betting windows at the stadiums (which i presume should be coming in the near future). The revenue potential for MGM and CZR could be staggering if they get betting windows at the stadium similar to horse racing betting (imagine all those fans who already shelled out $$ for tickets....they are more likely than the avg person to bet on the game...plus its part of the fun of going...just like horse racing)...but nothing concrete has materialized yet (and clearly the sports leagues will try to squeeze some of the profits from sportsbetting to themselves).
i'm thinking about taking a position for my retirement account, and was hoping some WSO banking geniuses could explain the potential (or lack thereof) in the various gaming stocks.
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