In a landmark case, the United States Supreme Court ruled earlier this week that states can now enact regulations for legal sports gambling; effectively legalizing gambling.
The ruling strikes down a 1992 federal law that banned such practices. The Supreme Court found the law to be unconstitutional because it forced states to maintain rules that outlaw other forms of gambling.
The move towards sports gambling enterprises could begin within weeks as states such as New Jersey have begun enacting legislation that repeals its former gambling prohibitions. Additionally, financial experts predict this move could open up a $4 billion industry, that had previously been untapped.
So far, numerous leading casino companies have seen an increase in their stock market value following the announcement.
Other companies expected to see an added increase include online gaming outlets such as Stars Group Inc. and International Speedway Corp. But experts warn, however, some of the biggest gains for casino companies might not the big player in Las Vegas, rather regional casino companies are likely to receive the largest benefits from the Supreme Court ruling.
With the opening up of gambling legislation in particular sports betting, Las Vegas will lose its monopoly over the industry, and thus see negative outcomes, while other regional companies like Penn National Gaming Corp and the popular Boyd Gaming Corp will see the biggest market gains. Estimates show the companies could increase their per share market value by $1.50 to $1.90, respectively.
Other states are looking to break into the industry as well, increasing the competition for sports betting and further devaluing those Las Vegas companies that have forever profited from sports gambling. States such as West Virginia, Pennsylvania, and New York have already begun enacting legislation for the reasonable taxing of sports-related betting.
Others, like that of New Jersey, could see sports betting at racetracks and casinos in the state within a matter of weeks.
But other industries might also see an increase in value. Specifically, sports franchises, sports media companies, and rights owners such as Liberty Media and Madison Square Garden could all see their values increase substantially through advertising and live sports content.
Its still to early to tell, as Congress will still have to enact regulations and guidelines for sports gambling, a move that some find might be challenging, given the current political climate. Experts, however, believe that states will be the driving force behind this legislation as many of them look forward to the possible $3.4 billion in revenue it could bring to the states.
The money would be a relief for cash-strapped states, by helping them build a stronger infrastructure, better education systems, and offer quality healthcare services. While sports gambling may only represent a tiny fraction of all gambling revenue in the United States, the benefits of its legalization will most certainly help various industries, organizations, franchises and individual people in a way that will be profoundly felt for years to come.