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Policy Focus: Legalized Sports Betting

04.01.2019 | Ben Phillips, CFA

Sports Betting Investments

The Policy in Focus series highlights a new policy driven investment theme (legislation or regulation) our team is monitoring. You can subscribe to the Weekly Market Recap to receive this report each week and visit www.EventSharesFunds.com for our investment solutions. 



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Background: Legalized Sports Betting


• During May 2018, the U.S. Supreme Court ruled in the case of Murphy v. NCAA. By a 6-3 majority, the court found that Congress exceed its authority when it prevented state from legalizing and regulating sports betting.


• The court ruling will likely spur the growth of the U.S. sports betting industry. Companies that provide sports betting odds, build the infrastructure to conduct the sports betting and manage gambler information, and casinos may see increased revenue as sports betting grows.



Our Take & Timing: The Opportunity


The legalization of sports betting could be a significant growth opportunity for the gaming industry. Companies interested in participating will need to build out their systems and arrange for service providers to provide betting odds. We're still in the early innings of a sports betting rollout, but company management teams are already discussing the potential growth in revenue opportunities.

The policy is now a state issue, so tracking which states have already approved sports betting or are close to legalizing it will be important. We believe there will likely be a flood of new states legalizing sports betting, followed by a period of low activity as the industry and regulations are developed.



LEARN MORE: This research is a byproduct of our active ETF.



Charts: Trading Range & Relative Performance


sports betting  


Impacted Companies: Stocks to Watch


  • Bookmakers: MGM, CHDN
  • Casinos: WYNN, LVS
  • Gaming Technology: PENN, IGT, SGMS, TSG
  • EventShares manages a portfolio of our best ideas.



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About EventShares


EventShares is an investment management firm dedicated to translating legislation and regulation coming out of Washington D.C. into real world investment solutions. The firm's goal is to provide its clients with attractive, long-term results by following a disciplined and differentiated approach to investing.

Headquartered in Newport Beach, CA EventShares serves individuals, financial advisors, as well as institutions and offers its sophisticated investment strategies through active ETFs and separately managed accounts (SMAs).


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