An estimated $400 billion black market is about to go mainstream.
No, I’m not talking about legal cannabis.
It’s illegal sports gambling.
And it’s all thanks to the United States Supreme Court.
In May 2018, the Court struck down a U.S. Federal law that prohibited legal sports gambling, ruling that it was unconstitutional. Sports gambling can now be authorized and regulated by the States, not by the Federal Government.
And it’s triggered a potential sports gambling revolution.
In October, the state of New Jersey handled more than $250 million in bets, a 41% increase from the previous month.
The Garden State is leading the way. Mississippi, Delaware, West Virginia, New Mexico, Pennsylvania, Rhode Island…the legal sports gambling world is growing by the day.
By 2022, sports fans around the world will be betting $1 trillion online every year.
Profiting from this new industry doesn’t have to mean rolling the dice.
Here’s five stocks investors should watch because of the shift to legal sports gambling:
#1 MGM Resorts (NYSE: MGM)
Sports betting is small potatoes in Vegas: compared to blackjack earnings of $1.24 billion, legal sports betting only pulled in a paltry $329.1 million.
But all that’s about to change, and major casino chain MGM Resorts (NYSE: MGM) is working to bring sports betting to the prime-time.
The biggest casino operator in the U.S. generates over $4 billion in revenue from Vegas alone. But it also has properties in Atlantic City, and just this year took over the Empire Casino in New York.
It’s got a pretty sizable footprint in the sports betting world, raking in $114 million from sport betting on the Strip last year, 35% of the total.
With a market cap of $13.5 billion, MGM has some deep pockets. And its using that financial muscle to corner the sports betting world.
It’s already launched sports betting at two Mississippi casinos, and became the “official gaming partner” of the NBA.
MGM Resorts has solidified deals with the biggest leagues in the country: basketball, hockey and professional baseball have all signed on to allow MGM to cross-promote the company’s casinos and sports betting app.
So far, MGM can only handle bets for teams based in states where betting has been formerly legalized.
By far the biggest prize is the National Football League, and MGM has already got its foot in the door. With Pennsylvania about to embrace legal sports betting, both the Philadelphia Eagles and the Pittsburgh Steelers will be fair-game.
As more states legalize, MGM can leverage its resources, properties and digital footprint to bring more and more sports betting market share under its control. As sports betting grows, expect MGM to reap the benefits.
#2 Bragg (TSX.V:BRAG.V; OTC:BKDCF)
When it comes to sports gambling, it’s all about the fans.
Without a rabid fan base, who will watch and bet again and again? Getting a sports gambling venture off the ground would be basically impossible.
That’s why DraftKings has been so successful: the company has 10 million active users.
But there’s another little company that’s about to challenge DraftKings and FanDuel for a share of online sports betting revenues.
Bragg Gaming Group (TSX.V:BRAG.V; OTC:BKDCF) formerly Breaking Data Corp., has an audience of 31 million for its media property, Give Me Sport (GMS).
Together with its online global gaming platform, Oryx Gaming, BRAGG has plans to leverage the Give Me Sport audience into the largest sports gaming customer base on earth.
Online gambling can be incredibly profitable, with one study estimating the gross market at $46.7 billion in 2018 and $89 billion by 2025.
GMS has a Facebook page with 26 million active, fanatic users.
For comparison, ESPN has only 19 million, and it’s a major media brand, worth $28 billion.
Or take Sky Bet, a property that was just sold for $5.7 billion, which had only 819,000 viewers.
BRAGG hopes to tap into its huge audience, using the Oryx Gaming services to launch a new sports-centric betting platform, Give Me Bet.
When Give Me Bet goes live, it will incorporate Oryx Gaming tech with the GMS brand, to deliver a catered on-line sports betting experience specifically for BRAGG’s audience.
The opportunity here is tied with BRAGG’s incredible positioning and pieces coming together.
The company is comparatively tiny, with only a $25 million market cap.
DraftKings, with an online gaming user base one-third as big as the number of GMS user sports fans, has been valued at more than $1 billion.
BRAGG has seen strong growth in its two major assets, Give Me Sports and Oryx. Just in the last year, Oryx has seen revenue growth of more than 400%. Monthly traffic in the UK for Give Me Sport has increased by 5 million, with revenue growing 30%.
If BRAGG (TSX.V:BRAG.V; OTC:BKDCF) taps a reasonable number of its huge potential audience, its earnings from sports gambling could be enormous.
This little company could be one of the biggest success stories of 2019.
#3 International Game Technology (NYSE: IGT)
This company has had a rocky year, climbing to a one-year high of $31 before falling to $14 in November, to stabilize in early December at around $16.
With a market cap of $3.4 billion and 12,000 employees, IGT is a big firm with a big footprint: it manufactures more casino gaming platforms and slot machines than any other company out there.
But times are changing, and IGT is branching out into sports betting.
IGT is a service provider, which means it doesn’t have to handle the risk of managing sportsbooks. All it needs to do is fulfill the needs of companies like MGM, constructing infrastructure that make the boom in sports betting possible.
In 2017, IGT handled more than $12 billion in sports betting.
That should make IGT a safe bet for investors looking to score on sports betting in 2019.
In July, IGT announced a deal with popular sports betting platform FanDuel. IGT will bring FanDuel’s services to its existing platforms in markets across fifteen states.
IGT is about to roll out PlayShot, a new service for sports betters, which will utilize FanDuel’s consumer-facing waging system, sportsbook.fanduel.com.
FanDuel plans to leverage IGT’s tech and its solid reputation to build its brand into the legal world of sports betting.
IGT, working alongside FanDuel, is ready to make a splash in New Jersey, the biggest new sports betting market. IGT will provide platforms for FanDuel’s services, merging the world’s largest gaming manufacturer with the largest sports betting platform in the world.
So, after a rocky year, it’s more than likely that IGT’s fortunes will pick up in 2019, along with the share price.
#4 Boyd Gaming Corporation (NYSE: BYD)
Boyd Gaming is one of the largest casino operators in the US, with 29 gaming properties in ten states.
Like MGM, Boyd is positioning itself to be a major player in the emerging sports gambling sector.
This company has some unique experience from the Vegas Strip: for the last decade, Boyd Gaming has handled the biggest sportsbooks in Sin City.
And now that sports betting is legal, it’s preparing to branch out into other regional markets.
The company just signed a deal with MGM Resorts, the casino chain that’s trying to corner the sports betting market.
The two companies have agreed to share online and mobile gaming platforms, with MGM offering up its online poker and casino gaming apps for Boyd’s sportsbook, in 15 states.
The “unprecedented” deal could mark the beginnings of a sports gambling empire, managed by MGM and Boyd.
Boyd’s got a new sports betting app, BConnected, that its rolled out in three casinos.
And like IGT, it’s signed a deal with FanDuel, leasing out its gaming properties for FanDuel’s mobile and online sports betting platform.
The deal covers all states where Boyd holds gaming licenses, excluding Nevada, and builds off of Boyd’s deal with MGM.
#5 Marriott International (NASDAQ: MAR)
You might not think a hotel chain would have much skin in the game, when it comes to sports gambling.
But you’d be wrong.
As one of the biggest hotel chains in the country, Marriott possesses marketing and rewards programs that casinos are eager to partner with.
As sports gambling grows around the country, sportsbooks holders like MGM and Boyd are going to want to partner with Marriott, to leverage the hotel chain’s customer base in order to rope in more business.
Marriott already has a sizable footprint in the casino world, with a licensing deal with JW Marriott Las Vegas Resort & Spa, as well as a number of casinos across the Caribbean.
And in February 2018, the company announced plans to build a 4,000 room resort and casino, The Drew, in the heart of the Vegas Strip.
Marriott has suffered some bad press lately, taking a hit for a data breach scandal in December.
But the stock is poised to bounce back, and could yield some excellent returns when sports gambling picks up and the national market grows and grows.
Other companies prepared to see huge growth as gaming takes off again:
Millennial Esports Corp. (TSXV:GAME.V)
Millenial E-sports is a small company based in Toronto focusing on E-sports and E-gaming.
The Company doesn’t just focus on content creation and broadcasting, it also offers data analytics and execution tools.
The company launched in 2013 with the goal of uniting E-sports communities and since, the company has planned many gaming tournaments, events and gatherings.
In 2017, the company started providing analytics and business intelligence products for the e-gaming industry, and recently, the company has partnered with the likes of Aston Martin and McLaren but also with MotoGp and Formula E, and has developed games for mobile platforms.
Pollard Banknote Ltd. (TSX:PBL)
Pollard Banknote is one of the world’s largest instant scratch-off lottery suppliers for over 30 years, distributing tickets to over 60 lottery and charitable gaming organizations across the globe. With top-tier marketing, new design developments and other innovative measures, Pollard has solidified its position as one of the greats.
One way that Pollard sets itself apart from the competition is its social media presence. Pollard has worked hard to leverage new media outlets including Facebook and Twitter to really up its marketing game…and its efforts show.
Like other companies in this list, however, Pollard continues to pay its investors healthy dividends, showing where its priorities really lie at the end of the sday.
Jackpot Digital Inc. (TSXV:JP)
Jackpot Digital is at the forefront of the digital gaming revolution, providing cutting-edge tech features, industry breaking mini-games, a wide variety of payment optionas and more. Additionally, Jackpot takes its regulatory responsibility seriously, and is fully compliant with all necessary regulations.
In addition to its online offerings, Jackpot Digital also offers a physical kiosk for casinos around the globe, allowing users to refill their accounts, fund gift cards, register for tournaments, and even allow casinos to add customized marketing displays.
Contagious Gaming Inc. (TSX:CNS.V)
Contagious is a software developer that has developed many systems for the e-gaming and lottery markets. The company has created a remote sports betting system that allows for live in-play betting during sporting events. The company’s content and technology can be delivered as a fully integrated service across a single, modern customer platform or can be offered as standalone verticals.
Contagious managed to grow its revenue in 2016 and 2017, but hasn’t managed to sustainably grow its after tax earnings over the last couple of years. The stock has fallen quite significantly in 2018 as it didn’t manage to live up to investor expectations, but managed to secure new funds in a private placement in 2018. This year could be a crucial year for the company as new gambling regulation in the U.S. could turn out to be a boon for this Vancouver based developer.
Pivot Technology Solutions Inc. (TSX:PTG)
Pivot focuses on the strategy to acquire and integrate technology solution providers, primarily in North America. It sells and supports integrated computer hardware, software and networking products for business databases, networks and network security systems.
Pivot has seen explosive growth so far, and with the acceleration of the fintech movement and the mobile tech industry, the company is sure to continue drawing investor interest.
Pivot is a standout of the bunch because it is not quite a gaming company, but provides tech that is absolutely essential in dealing with growing regulatory challenges, increasingly complicated IT issues and security of funds.
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
FORWARD-LOOKING STATEMENTS. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include that the gaming industry continues to grow; that a bigger investment opportunity than casinos may be in growth stocks like BRAGG; that GiveMeSport’s new website will start with sports betting before expanding into the other areas including casino games, e-sports, poker and lottery products; that BRAGG Systems may have a system that would be accepted by gamers; that it can leverage the Give Me Sport fan base into sports betting through BRAGG’s platform to drive adoption and growth; that BRAGG can protects its intellectual property; the size of the potential sports gaming market; that Oryx gives it the gaming platform to break into the online sports gaming and betting market: that more states in the US will legalize sports gaming; and that BRAGG’s revenues will continue to increase; and that the company intends to grow and acquire assets across the full spectrum of gaming verticals in multiple jurisdictions. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Matters that may affect the outcome of these forward looking statements include that markets may not materialize as expected; gaming may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; fans who like sport may not be converted to online sports gamblers; BRAGG may not be able to offer a competitive product or scale up as thought because of potential inferior online product, lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees or contacts; BRAGG’s intellectual property rights applications may not be granted and even if granted, may not adequately protect BRAGG’ intellectual property rights; and other risks affecting BRAGG in particular and the gaming industry generally. The forward-looking statements in this document are made as of the date hereof and the Company disclaims any intent or obligation to update such forward-looking statements except as required by applicable securities laws.
Risk factors for the online sports gaming industry in general which also affect BRAGG including without limitation the following: Competitors may offer better online gaming products luring away BRAGG’s customers; Technology changes rapidly in the business and if BRAGG fails to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality, timeliness and competitiveness of its products and services may suffer; BRAGG may experience security breaches and cyber threats; regulators may impose significant hurdles to online gaming companies; BRAGG’s business could be adversely affected if consumer protection, data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of consumer protection and data privacy laws generally; The products or services BRAGG distributes through its platform may contain defects, which could adversely affect BRAGG’ reputation.
DISCLAIMERS
PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Safehaven.com, Leacap Ltd, and their owners, managers, employees, and assigns (collectively “the Company”) has been paid by the profiled company or a third party to disseminate this communication. In this case the Company has been paid by BRAGG seventy thousand US dollars for this article and certain banner ads. This compensation is a major conflict with our ability to be unbiased, more specifically:
This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. We have been compensated by BRAGG to conduct investor awareness advertising and marketing for BRAGG. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor awareness marketing, which often end as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur.
We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public and non-public sources but is not researched or verified in any way whatsoever to ensure the information is correct.
SHARE OWNERSHIP. The owner of Safehaven.com owns shares and/or stock options of this featured company and therefore has an additional incentive to see the featured company’s stock perform well. The owner of Safehaven.com will not notify the market when it decides to buy or sell shares of this issuer in the market. The owner of Safehaven.com will be buying and selling shares of the featured company for its own profit. This is why we stress that you conduct extensive due diligence as well as seek the advice of your financial advisor or a registered broker-dealer before investing in any securities.
NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.
RISK OF INVESTING. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities.
