What’s on the cards for iGaming?
The specialist expects iGaming “hypergrowth” in 2021 as more states legalise online gaming. “Michigan is launching iGaming on Friday and West Virginia is starting to scale up, so I believe the iGaming market will clear USD 2bn, and I think it’ll be much closer to USD 2.5bn.” By 2025, the market should be close to a USD 15bn TAM across iGaming and sports betting, according to the Interview.
Also on the agenda was Penn National Gaming’s rationale for acquiring a stake in Barstool Sports in January 2020. “I think what Penn National Gaming was missing, if they were going to launch an online product, was a brand.” However, the expert believes Penn-Barstool “lacks a meaningful iGaming presence” and offered reasons why it’s likely to “struggle to build a national online casino business”.
In other observations, it was noted that leading operators increasingly want to own as much of their technology as possible, with DraftKings, FanDuel and BetMGM used as examples of this trend. “It’s clear that the people who are operating on their own technology… they’re all in at least eight states, whereas Rush Street Interactive is only in six states right now, Barstool Sportsbook is only in one state.”
Asked what portion of the future iGaming and online sports betting TAM Penn is likely to capture versus peers such as Caesars and DraftKings, the expert said: “I think there’s a path to 10%. They’re right on track. I view there to be significant risk though to that based on… the state of the product and technology, and the potential weakness in iGaming.”
With much happening in this burgeoning industry, the specialist said they would be closely watching how things unfold in Virginia and Michigan, where many operators are launching at the same time. “It is just the perfect market and perfect test case to determine who’s going to win, who has competitive advantage.”
To access all the human insights in Third Bridge Forum’s Penn National Gaming – Barstool Sports investment analysis & long-term outlook Interview, click here to view the full transcript.
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