Casinos May Find Favor With Media Outlets Entering Sports Betting
(Bloomberg) -- Fox Corp. and Walt Disney Co.’s ESPN are entering the world of sports betting -- and gaining notice as media companies look at new ways to build viewership in a world of declining pay-TV subscribers. But the real winners may prove to be regional gaming companies.
And there’s a chance even more media companies will want to expand into betting, says Telsey Advisory Group, which "could act as a catalyst for the casino operators that are able to monetize their access to sports betting," analyst Brian McGill wrote in a morning research note. “We don’t think any of this [is] priced into the stocks of the regional” gaming companies, he said.
Media companies will look to leverage the access of gaming operators, Telsey says. And as more states move to legalize sports betting, McGill sees Penn National Gaming Inc., Churchill Downs Inc., Full House Resorts Inc., Boyd Gaming Corp., Golden Entertainment Inc. and MGM Resorts International as among those best positioned to capitalize. The S&P Supercomposite Casinos and Gaming Index is climbing for a third day, rising 1.8% intraday.
"We are still in the early innings in overall legal sports betting, but the market does look like it will be significant for casino operators," McGill wrote. Telsey said Fox Sports estimated that U.S. sports betting revenue would reach $9.6 billion by 2025.
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