Jul 06, 2018
The Supreme Court has just created a $1 trillion opportunity. How often does that happen? I would say pretty much never. Over my 25 years of investing experience, I cannot remember anything that even comes close to the magnitude of the May 14 ruling.
The court decision opens up a lot of opportunity in an industry that probably wasn’t on a lot of investors’ radar. In fact, Bank of America (BAC) predicts that the gross revenue from legal sports betting will increase from the current $200 million annually to $5-$10 billion in the next five years. The low end of that range represents a 25X gain and suggests that there will be some big winners if this growth comes to fruition.
There are a number of players in the industry that can all succeed and take a big piece of the growing sports gambling pie. The most obvious would be the casinos that can easily add a sportsbook and attract gamblers who are already on their properties.
Plus, technology is needed to power the gambling experience on land and on mobile. In the coming years, the majority of wagers will be placed via apps, and we want to own companies that are at the forefront of this technology.
Then there are the bookmakers that have been around for years overseas, predominantly in the UK. Paddy Power Betfair is already making a big move into the United States with its recently purchase of FanDuel. And then there are the leagues and the teams themselves.
In fewer words, There are multiple ways to profit from this growing mega-trend. And that’s where my extensive research process comes into play.
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