What legalized online gambling means for the stock market in the US
For many years the US had tight reigns on the gambling sector. Many states had bans on casinos, sports betting, online gambling, and all other betting-related activities.
Some states still hold a no gambling policy; over time; we may see those laws be relaxed.
It wasn’t until 2018 that more states gained total or partial control of their gambling laws. The PASPA was a federal ban on sports betting across the USA and, the repeal meant that each state would govern itself on the gambling rules.
This was great news for states like Arizona and New Jersey, who were ready to take action and implement infrastructures to support gambling.
It was New Jersey that prompted the significant shift in the gambling laws after winning an 8-year-long battle. New Jersey believed that it was not legal only to allow one state to offer to bet.
Since the rules for online gambling, land-based casino betting, and others are subject to change, it is essential to check where online gambling is legal.
Gambling and betting cover: bingo, slots, poker, roulette, blackjack, and other games typically found in a casino. As well as sports betting, including horse racing, NFL, soccer, and football.
The Economic Value of Gambling
When gambling is legalized, the tax earnings can bring a substantial boost to the economy. And not just in terms of the spending of the patrons of the gambling establishments.
Since Nevada (Las Vegas) has the most established and well-known industry, it provides the perfect example.
Tourism in Las Vegas and Southern Nevada in 2019 bought in $58 billion. Since the industry is booming, it accounts for 40% of the employment in Clarks Country, which is over 37,000 jobs.
Across 40 states where gambling is legal in some form, it is estimated that there are 1.8 million jobs. And while Nevada’s tax rate is only 6.75%, that amounted to $7.87 billion in 2020.
Where there is the economic impact, there is an impact on the stock markets too.
Stock Market Impact and Legal Online Gambling
The online betting market is colossal, and with each year, that grows. When more states legalized online betting, the bigger it grew in popularity, and with that comes some interesting movement in the stock markets.
The AGA reported that in 2019, which was the first year that sports betting what legal in the US, there was $13 billion wagered.
Which was double the $6.5 billion in 2018.
By any standard of growth, that is exciting. And, when it comes to the stock market, some believe to put money where the growth is.
In 2020 gaming stock was one of the hottest commodities. In 2021, independent research company Gambling Compliance said that the US betting market would be worth $8.2 billion by 2024.
They’re not alone in that estimation; Morgan Stanley believes that the US sports betting market will reach $10 billion in 2025 and $100 billion globally.
Here are four stocks related to the industry:
- Penn National Gaming
- DraftKings Inc
- Esports Technologies
- GAN limited
The future of online gambling in the US
While Nevada is the most well-known and longest active gambling state within the US, experts believe that New Jersey will general $225 million per year alone.
Currently, the most significant state to legalize online gambling is Pennsylvania, and trends show that they are one of the fastest-growing online markets in the US.
The digital space has grown at a rate that no one could’ve predicted due to several economic factors that lead to the closure of many land-based casinos.
Combined with a vast improvement of technology, online gambling took the world – and now the US by storm.
Mobile apps bring in a level of convenience that has allowed gaming enthusiasts to play wherever they are – so long as it is legal in their state.
Casino game providers remain at the cutting edge of technology to offer their customers all of the latest games. Including, and not limited to, the introduction of the ability to use cryptocurrency as a payment method.
Combining cool technology like AR and VR will increase the immersive experience of online gambling and pique players who prefer a more active way of playing online.
The online gambling experience can be further improved with the use of AI. Helping to predict how players will play, which games are the most popular, and highlighting opportunities to capitalize on that.
AI can also bring in improved security and age verification for players. Using facial recognition technology
As we see in the UK, both online and land-based casinos can be managed and regulated by official bodies. Implementing the infrastructure to support the industry while keeping patrons safe is of paramount importance.
If the rise of the casino industry increases, the stock market could keep growing too. An upward trend in the number of people who are investing in the iGaming market may see an increase.
Online gaming and the iGaming market are set to grow to $127.3 billion by 2027 according to some, making it a massive market already and one that could continue to grow – based on current trends.
iGaming is a new and exciting market that gives investors and online casino players something fresh to explore.
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