Goldman Sachs Predicts Surge in iGaming Sports Market

Many financial experts say the past year’s surge in online gambling is a Covid-induced anomaly. Not Goldman Sachs. The investment bank is going all-in on internet casinos and sports betting as a long-term play for their investors. They recently released a guidance statement projecting growth for US internet gambling that extends for more than a decade.

Expected Online Gambling Growth

Goldman Sachs is betting on online gambling. The investment bank has issued positive statements about the future of the industry in a note to clients:

We expect a combination of favorable legislation and consumer adoption to drive growth in US online sports betting and internet gambling (i-Gaming) from $900 million/$1.5 billion markets today to $39 billion/$14 billion in 2033, equating to 40 percent/27 percent CAGRs for over a decade.

Goldman Sachs

That’s Wall Street speak for “business is booming.” And why shouldn’t Goldman make a play on internet gambling? It has been a popular pastime for a long time. Since betting has gone online, it has seen a steady climb in revenue. Nations such as the UK have made all forms of wagering legal and regulated. The US is catching up in laws and regulations.

US Regulated Online Gambling Markets

The US is catching on to the cyber-wagering trend. Since Delaware legalized online betting in 2018, more states have adjusted their laws to accommodate internet bettors, who had been navigating international waters for their fun.

Now 15 states host online gambling sites, not including dozens more that allow online wagering on horse racing. Five of those states have casinos up on the web, and more states are on the way.

Most experts expect the online gambling industry to continue to grow over the next few years. Finance Monthly has predicted that the global industry, now worth about $53 billion, will be valued at $90 billion by 2025.

Companies Goldman Bets On

Many companies related to the online casino and sports gambling industry publicly traded both on US and foreign markets. Goldman has focused on these four for investors:

DraftKings

The company is relatively new to the stock exchange but not to fans of fantasy sports. DraftKing’s expansion from fantasy sports to event sports betting and online casinohas caught investors’ attention.

Although the company is yet to turn a profit, Goldman likes it for its sustained market-leading position and its presence in states with little other competition.

Caesars Entertainment

Caesars Entertainment is the well-known land-based resort and casino business branching out into an online presence as more states change their internet gambling laws.

Goldman likes this diversity and justifies the recommendation based on its forecast growth in online casinos and sports gambling.

Rush Street Interactive

A relatively unknown to anyone but industry insiders, Rush Street Interactive, is an iGaming company with casinos and sports betting operations in nine states and Latin America.

Its significant footprint in internet casinos and sports wagering, both domestically and abroad, attracted Goldman. 

Penn National Gaming

Like DraftKings, Penn is a Goldman pick because it has emerged as a sports betting market leader.

Penn National’s Barstool Sportsbook went live in Michigan and Virginia in January. They hope to gain more ground when and if New York, Florida, and Texas, pass pending legislation.

The Future of iGaming and Sports Betting

Ever since the first casino went online more than two decades ago, the internet gambling industry has demonstrated popularity and growth potential. Now, as more states see the chances of much-needed extra revenue, the US market is opening up, and expectations appear even more promising. Goldman Sachs’s confidence is just the latest indicator.

NOTE: We at OUSC are not financial experts, and past stock performance doesn’t guarantee future results. So acting strictly on this information is at your own risk. We suggest consulting your broker or financial advisor before investing.