US legalises sports betting: Here are the winners
3 minute read
After a long term ban, the US Supreme Court has cleared the way for US states to legalise betting on sports.
The Court struck down the 1992 federal law, the Professional and Amateur Sports Protection Act, which outlawed any gambling on sports outside of Nevada, meaning that any US state that wants sports gambling can now have it. Gamblers will be permitted to bet on single games and championships for a variety of professional sports including baseball, football, hockey, basketball, soccer, golf and auto racing.
Experts predict that gambling on sports could quickly become widely available across the US. One research firm estimates that 32 states would likely offer sports betting within five years, while Delaware’s legal sports wagering has already kicked off and many other states have laid the legal groundwork to have sports betting within weeks.
Already, Americans are believed to wager about $US150 billion (A$199B) on sports each year illegally, say the American Gaming Association — a figure that will almost certainly get a boost once betting is legalised across states.
This means there are going to be some winners, and I’m not talking about the gamblers themselves. The US federal government states are first in line, set to generate significant tax revenues from the change in legislation. Winning will be taxed as ordinary income at the individuals marginal tax rate .
The change in legislation will also pay off for listed gaming-related companies, which have already got a boost on US stock exchanges.
Casino stocks were particularly strong and many surged after the ruling was announced, including Penn National Gaming, Inc (NASDAQ:PENN) and Monarch Casino & Resort, Inc. (NASDAQ:MCRI).
In addition to casino operators, sports broadcasters such as Walt Disney Co (NYDE:DIS), MSG Networks (NYSE:MSGN) and CBS Corporation (NYSE:CBS), as well as equipment makers are expected to benefit from the ruling.
Australian online gaming and DFS firm PlayUp is confident that some of that enthusiasm can flow on as it prepare for its dual listing on the NASDAQ and ASX via a reverse takeover of Mission NewEnergy Limited (ASX:MBT | OTC:MNELF).
PlayUp intends to raise US40 million ($51.5 million) through the reverse listing on the ASX and deliver “the world’s first fully-integrated, blockchain enabled global fantasy sports, online sports betting & gaming ecosystem”.
It seems they couldn’t have timed it any better. New US legislation should now give PlayUp’s aspirations a boost.
The platform presently boasts over $550 million of annual transaction volume (Playup generates anywhere from 7c to 12c of every dollar) with 69,000 current paid users.
PlayUp has already locked in a number of acquisitions as it works towards its goal of becoming one of the largest fantasy sports platform operators. It has so far acquired online platform, betting.club, and CrownBet’s DraftStars, while it also has plans to buy Sydney-based ClassicBet.
PlayUp, which is understood to have 400,000 registered users, also plans to enter the cryptocurrency craze.
However, any news is speculative at this stage therefore investors considering this stock for their portfolio, should seek professional financial advice.
Mission NewEnergy has lodged disclosure documents to the ASX to approve the proposed transaction with PlayUp, however it is yet to make an announcement regarding the deal to as it works to determine the whether the company will be suitable for listing.