US predictions for 2021 - including US states to watch and a surge in online gambling stocks

Brandon Walker, head of Amelco USA

US states: ones to watch

At the time of writing, Michigan has just announced its open for business – so we’re expecting to see plenty of launches in Q1 come the new year. Looking ahead to 2021, Iowa’s first on the list for states to keep an eye on. The Hawkeye State will be removing its on-site registration restrictions in the new year, which means customers will no longer have to register in-person at the casino to access online sportsbook before they can get in on the action – with a huge boost in player acquisition now on the cards.

Maryland and Ohio are next up on the list – both offer plenty of potential, and although the nature of bureaucracy involved means that it will be hard to gauge how long that process will take, the odds are certainly looking good for 2021. Last, but not least (and I’ll insert my own disclaimer that this may not happen by the year’s end), we’ll finish the shortlist with New York and California. As two of the major East coast and West coast states with a combined population of 60 million, it’s going to be very interesting to watch how they play out in the regulation process.

Make way for online casino

We’ve learnt a lot this year during the downtime of US sport – and player habits have been hugely similar to Europe in choosing alternative verticals. The difference, however, is that unlike Europe, the majority of US states restrict the provision of online casino games. Up to this point, Pennsylvania and New Jersey are the only two states to really capitalize on offering an online casino experience. The likes of Colorado, Tennessee, and Indiana and a number of other states are set to be left out in the cold if we see another repeat of cancelations in 2021. I predict we’ll see plenty of changes in the year ahead given the clear business case for the mass rollout of online casino – it’s too important for online operators not to need it given the uncertainty lying ahead when it comes to Covid.

Player props are going to be big

If you’ve spent time in a sports betting zone in Vegas, you’re going to know how hungry for stats US punters are. Player stats, turnovers, touchdowns, yards, you name it – you’re not going to find a betting culture like it anywhere else. As more and more markets in the US go online for sports betting – we’re going to see a surge in companies rushing in to provide for the gap in supply when it comes to accurate predictive analytics. Swish Analytics is a great example of this, and I’m sure they’ll do very well next year with some fantastic algorithmic tools for prop bets.

Chris Kape, president, JAMCO Capital

Canada will legalize single-event sports betting

Sometime in 2021, close to three years post the overturning of the Professional and Amateur Sports Protection Act (PASPA) in the US, Canada will read and vote on Bill C-13 in parliament and vote to allow single-event sports betting. This will pave the way for each province to build a framework to regulate sports betting, no different than they currently do for other forms of gambling like casinos and lotteries. While each province will work at their own pace, Canada’s largest province by population, Ontario, is already preparing to capitalize on sports betting being legalized with its own regulations already being worked out. With a progressive and aggressive policy, it is believed that Ontario is poised to allow numerous private operators into both online sports betting and gambling. These two policies working in tandem should provide Ontario with an immediate and enduring economic boost through taxation, similar to the economic successes found in Pennsylvania and New Jersey when they legalized sports betting. Hopefully, other provinces take note of their southern neighbors’ successes as they have demonstrated that many aspects of sports betting are good for the economy. That said, it is equally important they heed their cautionary tales because high-tax burdens, single-operator monopolies, and in-person registration requirements will not be beneficial and warrant consideration.

Six states will go live with sports betting and as many as 21 will begin the process of regulation

The two years post the repeal of PASPA were great for sports betting with new states coming online practically every month across the US. While the momentum was expected to result in even more states coming on board in 2020, Covid had other plans that ended up unexpectedly slowing things down. Most state legislative sessions were either delayed, postponed or cut short, leading to a tangle of unfinished legal business, partisan politics, and disappointed would-be operators left in a continual planning stage.

With a successful vaccine rollout on the horizon, 2021 is already stacking up to be different with many states poised to return to business as usual. As an example, Maryland, South Dakota, and Louisiana, having passed voter referendums by impressive margins, will be examining sports betting legislation in early 2021. Washington and North Carolina have approved tribal sports betting and Virginia will go live with in-person and online sports betting in the first half of 2021.

But that’s not all – up to 21 more states will be examining the subject, with many of them likely to pass laws to regulate sports gambling in 2021. Most notably, the three largest markets are on this list – California, Texas, and Florida. In addition, we will see mid-sized and smaller states such as Oklahoma, Maine, Nebraska, Connecticut, Kentucky, Massachusetts, Minnesota, Missouri, Kansas, South Carolina, Ohio, Arizona, Hawaii, Georgia, Vermont, Alabama, Alaska, and Wyoming likely coming online.  Needless to say, 2021 will be a very busy year for the sports betting industry.

Online gambling stocks will surge in 2021

Throughout the Covid pandemic, online gambling did not stop operating – unlike their in-person counterparts, which all closed down throughout the US and the world for months at a time. In addition, and for obvious reasons including those stated in the above two predictions, the interest in gaming in general has grown, with online and sports betting continuing to lead the way. In fact, according to Technavio, for the first time in history the online gambling market may surpass $1trn in 2021.

Look to companies that have big ‘bets’ on online gambling such as DraftKings (NASDAQ: DKNG), Flutter Entertainment (LON: FLTR), Penn National Gaming (NASDAQ: PENN), The Roundhill Sports Betting & Gaming ETF (NYSE: BETZ), Golden Nugget Online Gaming (NASDAQ: GNOG), Scientific Games (NASDAQ: SGMS) and GameAccount Network (NASDAQ:GAN) to name a few.