The potential for record-setting Super Bowl betting … more and more states legalizing … how you can play it

For sports gamblers, this Sunday is a holy day.

Super Bowl LV, featuring the Tampa Bay Buccaneers and the Kansas City Chiefs, will be central to millions of bets taking place all around the world.

But if you think all the action will be based on what’s happening between the teams, you’re way off …

The artist, The Weeknd (that’s not a typo), will be the halftime performer.

You could bet on whether he plays more or fewer than 8 songs at halftime …

That might seem like a lot, but remember, sometimes there could be just the hook from one song, or perhaps an abbreviated medley of songs.

Or you could bet on how many wardrobe-changes he will have during his performance. The over/under line is 0.5.

You could also bet on the first — or last — song the he’ll play … whether he’ll mention Canada (The Weeknd is Canadian) … whether he’ll mention Joe Biden — or Trump, for that matter … or whether fellow artist, Drake, will show up on stage …

The point is, there are a multitude of bets available to gamblers.

And what that means is a tremendous amount of money will change hands this Sunday.

For more on that, here’s Matt McCall, editor of Investment Opportunities:

When this year’s game kicks off between the Kansas City Chiefs and Tampa Bay Buccaneers, fans won’t be the only ones excited. According to PlayUSA.​com, gamblers in the U.S. will wager more than $500 million on the big game.

That would be the largest amount of legal money ever wagered on one event.

I underlined the word “legal” because that’s the key. Until just a few years ago, legal wagering on sporting events was available only in Nevada …

I see incredible wealth-building potential in the sports gambling, online gaming, and eSports investment trends throughout the rest of the Roaring 2020s …

I don’t know how well people will do with their actual bets, but I expect we can make a whole lot of money as investors.

In today’s Digest, as we look forward to the Super Bowl, let’s check in on the growth of the legalized sports gambling industry. If Matt’s right, we’re only in the infancy of a massive trend that will pay off for years to come.

***How we got here, and where sports gambling is going

For newer Digest readers, Matt is our expert thematic investor.

In his newsletter, Investment Opportunities, he finds the major trends or “themes” that are reshaping our world, and by extension, our investment markets. He then identifies the specific stocks best positioned to ride those trends higher.

It just so happens that one of the fastest growing trends today is legalized sports gambling.

How fast?

Well, it was back in 1992 when the Professional and Amateur Sports Protection Act became law. This banned sports betting in the U.S., except in Nevada.

It was less than three years ago that this finally changed — May 14, 2018, to be exact. This happened when the U.S. Supreme Court overturned the law by a 6-to-3 vote.

Now, the Supreme Court decision didn’t legalize sports gambling — rather, the decision made it not illegal. This means it’s up to each state to decide if, how, and when sports betting operates within its borders.

But states have been deciding, and they’ve been saying “yes” to legalization — and the momentum is building.

Back to Matt:

It didn’t take long for states around the country to start legalizing sports betting. Today, it is legal in some form in 20 states and Washington, D.C.

And we can see the growth accelerating.

Areas where betting is legal now cover 120 million people, more than one-third of the country’s population. That’s up 70% over last year, when only 14 states with 70 million people offered legal sports betting.

 

 

Growth accelerated even during the pandemic, as legalization spread and several technological innovations converged. That’s the Roaring 2020s for you.

***The massive growth ahead

In his most recent issue of Investment Opportunities, Matt writes that with spreading legalization and ongoing technological improvements, we should reach the point where nearly every adult in the country will have access to sports wagering. He notes that the research firm, Macquarie, believes that in the next five years, 96% of all adults will be able to place a sports-gambling wager.

If that projection sounds a bit too lofty to you, here’s Matt’s take:

I find it nearly inconceivable that any state would not join the trend.

Most have major budget concerns that won’t improve any time soon, and tax revenue from legal sports gambling will be awfully hard to resist … especially if neighboring states legalize it.

The New York Times recently ran a piece echoing Matt’s point:

Bookmakers have said the sports betting market is maturing faster than they anticipated, with an unfortunate and unlikely assist from the economic devastation left by the coronavirus pandemic.

“The tipping point is here. What we went through last year is the driver,” said Kip Levin, the chief executive officer of FOX Bet.

Even with the disruption in sports, Levin said, 14 betting states collectively took in more than $1 billion in revenue in 2020, demonstrating that sports gambling can bolster economies in new markets.

“State officials recognize this and now they need revenues for their state,” he said …

Gov. Andrew M. Cuomo of New York, who is banking on the State Legislature to approve mobile sports betting this spring, has said it could bring hundreds of millions of dollars into state coffers as New York is facing a multi-billion-dollar deficit.

 

***As more states legalize, what market size does that create?

First, let’s establish some context.

Matt writes that the American Gaming Association estimates that roughly $6.8 billion was wagered on last year’s Super Bowl — and only $300 million of that was legal.

This means just 4% of last year’s bets were placed legally.

Back to Matt:

This suggests two things. A staggering amount of money still needs to shift from being bet illegally to being bet legally.

And well over $7 billion in bets will likely be placed on this year’s Super Bowl. It is truly incredible.

So, exactly how big is this potential legal market as more and more states remove this trend from the shadows?

Here’s The New York Times:

The more than $1 billion in 2020 revenue is projected to grow sixfold by 2023, according to a study by Eilers & Krejcik Gaming, a research and consulting firm.

If all 50 states permit sports betting, revenues will surpass $19 billion annually, the study projects.

 

***How to take advantage of the legalized sports gambling trend

Last year, Matt commented on some ways investors could approach the sector:

There are a number of players that can take a big piece of the growing sports gambling pie.

The most obvious are the casinos that can easily add a sportsbook and attract gamblers who are already on their properties …

There are the bookmakers that have been around for years, many of these overseas. Several are making big moves into the United States as they struggle on their home turf, including one I recommend in Investment Opportunities.

Then, 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, so there are opportunities in companies at the forefront of this technology.

 

To get a sense of how much investment wealth is possible, all we have to do is look at Penn National Gaming (PENN).

Since its March low, PENN has soared more than 2,700% percent.

That’s enough to turn a $1,000 grubstake into, say, a 2020 Acura ILX (MSRP at $26,895).

And remember, this is with less than half of U.S. states having legalized sports betting so far.

Back to Matt:

As technology converges with legalization, sports betting is entering hypergrowth territory.

This trend is now too powerful and too big to overlook. That’s why I just unveiled our new iGaming/eSports Portfolio in Investment Opportunities, including two new recommendations in great position to make money.

To learn more about Investment Opportunities and Matt’s two new picks, click here. At a minimum, give this sector serious consideration. The growth rate in the last three years, and the growth potential over the next three, are enormous.

Have a good evening,

Jeff Remsburg