Caesars Entertainment and MGM Resorts International are working on boosting its exposure in the domestic sports market which has been growing by leaps and bounds since the industry was legalized in 2018. Though this move couldn’t be more welcome, some analysts are apprehensive, stating that the financial market hasn’t yet fully matured to appreciate the operators’ growing footprint in the industry.
Thanks to its landmark partnership with William Hill as we’ve discussed here, Caesars Entertainment is now viewed as a resolute force in the sports gambling space. In the meantime, MGM is also making major moves and is leveraging its partnership with GVC Holdings to grow its internet casinos, as well as its sports betting businesses.
Caesars, which is easily one of the largest gaming-entertainment companies in the U.S. partnership with William Hill, also one of the world’s most diversified gaming entertainment companies as covered here, will only help to boost the brand’s popularity and prominence in the industry.
Well-known leisure analyst Dan Wasiolek states that investors in the sports wagering landscape that are similarly looking for exposure should review what the operators at Harrah’s and Bellagio are doing.
“Of the companies we cover, Caesars Entertainment and MGM stand to benefit the most from sports betting expansion in the U.S., given their respective 100% and 79% earnings before interest, taxes, depreciation, and amortization (EBITDA) exposure to domestic gaming markets in 2019,” said Wasiolek in a recent report.
Wasiolek goes on to state further that sports betting could potentially drive $550 million in turnover for Caesars in 2021, which equals 5.9 % of the operator’s total revenue. This estimate excludes the $100 million to be acquired from iGaming revenue in both New Jersey and Pennsylvania. At $650 million, this projection is in line with the $600 million to $700 million in revenue Caesars expects to deliver in 2021.
Caesars Entertainment is expected to have at least 40 of its 51 properties in states that enjoy legalized sports betting by 2021. This opportunity for growth could generate close to $2.16 billion in revenue for the operator. As one of the best-reviewed casino operators today as discussed here, Caesars controls 21 gaming properties in both Nevada and New Jersey, which stand as the country’s biggest sports betting markets today.
Of the remaining 11 Caesars venues and facilities, 10 exist in states that are projected to permit legal sports betting by 2024, which will make penetration and integration into these markets a lot easier than expected. This means that Wasiolek’s predictions aren’t too far off with Caesar’s expected to lead the pack in the burgeoning sports betting market.
BetMGM is also thriving right alongside Caesars Entertainment
And it’s not just the Caesars’ brand that looks promising. BetMGM is also quickly becoming a force to reckon with. GVC, BetMGM’s primary partner recently announced that its collaboration with BetMGM today commands an average market share of 17% in the regions in which it operates. The operator is also on-brand to deliver overall revenue to the tune of $150 to $160 million by the time the year comes to a close.
“Lead by its strong portfolio of 13 Vegas properties, one of only three industry Detroit casinos in Michigan, its Borgata resort in New Jersey, a loyalty database of 34 million members, and its mobile platform that has partnered with major professional sports associations, we see MGM capturing a 22% share of this existing revenue opportunity, resulting in $365 million in sports revenue in 2021, or 3.4% of our forecast for its total sales that year,” said Wasiolek.
The betting industry is fairing on well
Despite the challenges that 2020 has presented, the sports betting industry is still vibrant and thriving. Given that sports leagues are tentatively making their return after months of lockdown, the future looks bright. However, the struggles are far from over.
Not only is there a potential for a second wave of outbreaks that will cause everything to be shut down once again but the reality remains that until this pandemic nightmare is over, traditional pro sports as we know them could be put on hold once again. The best thing that brands such as Caesars can do is to diversify its offerings.
Like many other bookies, BetMGM and Caesars have been forced to place focus on other areas of interest such as virtual sports and eSports. Operators will likely continue to do so even with the return of big sporting markets.
The global sports betting market today is poised to grow by as much as 144.44 billion between 2020 and 2024 so operators must do their level best to ensure that they remain competitive within this market. Furthermore, the increased penetration of different online platforms is also another great reason for BetMGM and Caesars to do everything they can to stand out.
Sports betting as well as online gaming in the country has become one of the most exciting prospects for sports lovers, punters, and investors in recent times. Caesars Entertainment continues to stand as a market leader in a business that is very quickly becoming saturated. As long as Caesars continues making worthwhile partnerships and collaborations it will continue to serve customers in the fast-growing U.S. sports betting and online market.
Caesars is of the full opinion that today’s sports betting and online gaming sector epitomizes one of the leading areas of progression in the U.S. gaming industry. Some experts even predict that the market size could grow to reach $30-35 billion. And this growth will continue as long as gaming legislation at the state level continues to accelerate.
Are you a New Jersey resident interested in playing online in our state and taking advantage of the best offers? Check out our curated list of NJ casinos, NJ sportsbooks, and online bonuses. And if you are a poker player, please check our list of Best Poker Sites in New Jersey.