The Sunday of Super BowlTomorrow (9) is a unique annual experience. Full of exaggerated contests, entertainment in prime time, celebrities and a lot, a lot of game. Not only in the field but in bets. Therefore, experts estimate that the volume of bets will reach $ 1.4 billion About the National Football League (NFL) game between Kansas City Chiefs and Philadelphia Eagles.
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This is only the accounted for in the legal means of betting of sports. Numerous will also be made in risky private transactions. Combine this with the global reach of the show and it is safe to say that millions of viewers around the world will be glued to their phones on Sunday night, monitoring their bets on various game applications.
Betts actions in low
But besides the Super Bowl, the world of games is looking at the actions of the game companies, which have plummeted after the pandemic. An index that tracks the sector fell 39% compared to the highest increase of all time, in March 2021, while the S&P 500 rose 52% in the same period.
Draftkings Inc. 41% have fallen since it established a record in March 2021. MGM Resorts International – whose Betmgm Sportsbook is a joint venture with the English PLC – sank 32% compared to a July 2023. Inc. 70% fell from peak in October 2021. Bucking The Trend is the father of Fanduel Flutter Entertainment PLC, who marked a new record in early December.
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“It was certainly a difficult year for games in 2024,” said Barry Jonas, an analyst at Truist Securities. “On the side of sports bets, lower performance can be attributed to uncertainties both legislative and margin reduction.”
Collection is still high
Even so, gambling companies are still raising a lot of money. The US commercial game industry obtained about US $ 67 billion In total revenue of casino games, sports bets and igaming in 2023, marking three years in a row of records, according to data from the American Gaming Association (AGA). Last year was probably one of the highest revenues of all time, with US $ 70 billion estimates in revenue.
“You usually get 100 million viewers in the Super Bowl,” said Chad Beynon, Macquarie’s game analyst. “This is a good time for some of these betting apps to show people where they have improved the product.”
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What stock prices reflect, however, is that it is reducing growth and restrictions are increasing. The game revenue in the Las Vegas range fell 2.7% in December for the sixth consecutive month of falling comparison year by year. In Macao, companies face pressures of consumer discouragement in China. Not even NFL is helping to raise to the level of before, as this football season was the worst recorded for sports betting companies.
Online Games
Online game companies such as draftkings and Flutter have expanded rapidly since 2018, when the Supreme Court released states to legalize unique bets. Currently, 38 states and the district of Columbia are open to business. But now they are facing the increase in state taxes and increased competition. Betting application premieres in new states have slowed down, with only two market releases last year.
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Regulations and taxes
The Federal Safe Bet Act, which was introduced in Congress at the end of last year, seeks, among other things, to limit how sports betting companies use artificial intelligence to attract players. Meanwhile, Connecticut proposed to limit the percentage of betting operators, known as waiting. And Massachusetts seeks to implement accessibility checks for gamblers.
At the same time, local governments continue to tax the gambling industry to help deal with budget deficits. This week alone, Ohio’s governor Mike Dewine introduced a new budget that would double the state tax rate for sports betting operators from 20% to 40%. This follows a recent proposal from Maryland’s governor, Wes Moore, to double the 15% to 30% games taxes.
Revenue reflection
All these challenges in the industry are beginning to appear in companies’ gains. Flutter said its revenue in the United States by 2024 will be $ 370 million below its nearly $ 5.8 billion guidance due to the impact of the deceleration on sports bets on the fourth quarter. Draftkings also reduced, after the results of the third quarter, the forecast of its revenue and profit to 2024.
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Las Vegas Sands Corp., which has most of its recipe from Macau and Singapore, recorded a net revenue above estimates. But even so, the shares fell 16% this year. MGM, Caesars and Wynn Resorts Ltd. They should report their results in the coming weeks, but analysts are already preparing for a below -expected performance due to difficult comparisons last year, when there was the inaugural race of the Grand Prix of Formula 1, in Vegas. MGM and Caesars saw the prices of their shares fall more than 20% in 2024, as they depend a lot on traffic.
“Although the increase in sports betting taxes will be inevitable, we hope that legalization restricts the illicit markets,” writes BMO Capital Markets analyst Brian Pitz.
In search of attractions
To keep the good times, the US Game Industry is looking for catalysts to attract players. For example, a unique bet that combines various results or cumulative, called Parlay, offer greater gain than traditional unique bets. FANDUEL has developed technology that offers more parlay options. And draftkings is testing a monthly subscription service that would provide customers with better chances.
For physical casinos, the path seems to pass away from Las Vegas. Caesars generates more than half of its business outside the city, and MGM receives a little over half of its recipe there. Both companies operate about two dozen properties combined along the Vegas range.
Another growth area is igaming, an umbrella term for online casino games, including Blackjack and virtual poker. It is only available in seven United States, but the game industry is optimistic that increased regulations will make legislators more likely to approve legislation to support adoption.
Entry into newly legalized markets and additional penetration in existing are the biggest boosters of the industry’s growth, according to Royce Investment Partners portfolio manager Skinner, which began to hold a position on draftkings in the third quarter.
“Management is not standing,” he said about draftkings. “They expanded their platform to include online casino games and regional lottery offers, with the view that there are many cross-client opportunities.”
