Further sports betting legalization and launches in additional states represents a major catalyst for a sector that has posted solid returns in 2020.
The Next States To Launch: BofA Securities analyst Shaun Kelley shared takeaways in a note from a conversation with Chris Grove and Becca Giden of Eilers & Krejcik Gaming.
Michigan, Tennessee and Virginia are the next states expected to launch, with go-live dates expected for November, December and February, respectively, the analyst said.
“Michigan’s upcoming launch for online sports betting and iGaming is one of the most anticipated to date,” he said.
Combined, the three states represent 8% of the adult population in the United States.
The launches come after states like New Jersey and Pennsylvania posted record months for sports betting.
3 States On Ballot: Louisiana, Maryland and South Dakota represent a combined 4% of the adult population in the U.S. All three states have sports betting referendums on the November ballot.
Louisiana passed daily fantasy sports regulations in 2018 with 73% of counties approving, Kelley said, adding that it could be a positive read-through for state approval of sports betting.
Maryland voters appear to be split on approving sports betting, the analyst said.
States that vote on approval wouldn’t likely be operational before the fourth quarter of 2021, according to BofA.
Related Link: Talking Sports Betting And Dave Portnoy With BETZ ETF Founders
More States Approach Legalization: BofA also highlighted positive traction in Ohio and Massachusetts, which together represent 6% of the adult population in the U.S.
Both states could pass legislation before the end of the year that legalizes sports betting, Kelley said.
Progress is also being made in Texas and New York, two states that make up a combined 15% of the adult population.
Big names like Mark Cuban and Jerry Jones are said to be pushing for legalization of sports betting in Texas, the analyst said.
Sheldon Adelson, the CEO of Las Vegas Sands Corp (NYSE: LVS), is also said to be involved in Texas negotiations. he said.
This is notable, as Adelson has been a vocal opponent of online sports betting outside of Las Vegas, Kelley said.
BofA On Crossing The 50% Mark: In 2018, only 10% of the adult population had access to sports betting, Kelley said.
By 2019-2020, an additional 23% of the population gained exposure, bringing the cumulative total to 33%, the analyst said.
The 2021-2022 period is expected to bring 24% of the adult population access to sports betting, which could help take the cumulative total to 57%.
By 2022, over 50% of the U.S. population is expected to have the ability to bet on sports, according to BofA.
Stocks, ETF To Watch: Barstool Sportsbook, which is partially owned by Penn National Gaming (NASDAQ: PENN), is expected to launch in additional states like Michigan following its Pennsylvania debut.
BetMGM, a joint venture from MGM Resorts International (NYSE: MGM), DraftKings Inc (NASDAQ: DKNG) and FanDuel, is expected to be an early player in Michigan.
Gan Limited (NASDAQ: GAN) and Wynn Resorts (NASDAQ: WYNN) also announced plans to launch online sports betting and iGaming in Michigan.
The Roundhill Sports Betting and iGaming ETF (NYSE: BETZ) is a pure play way to invest in the growth of sports betting with ownership of U.S. and international names.
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