U.S. sports betting may bring worth $5 billion profits by 2023

According to Jefferies, the booming U.S. sports betting market is expected to bring $5 billion in profits by 2023 with here British betting stocks set to soar as a result of this.

A target price has been raised by the bank’s analysts on U.K- listed trio Flutter Entertainment, which was formerly known as Paddy Power, William Hill and Ladbrokes Coral owner GVC. These three could double good profits in five years. It is assumed that Flutter has a 20% market share, with William Hill and GVC both having a 10% market share combined.

Jefferies has predicted a gross gaming yield of $19 billion from the U.S. market by 2023- which is equivalent to a $5 billion Ebitda opportunity.

Following a Supreme Court ruling in May 2018 which stroked down a ban on state-authorized gambling on football, basketball, and ice hockey, the number of states legalize sports betting has increased.

20 U.S. states according to Jefferies have so far legalized sports betting, with 14 taking bets so far, that was “more quickly than we originally anticipated.”

Another reason for the upgrade of Jefferies is the rapid growth of sports betting in New Jersey. It is the first new state to legalize since the ruling.

James Wheatcroft who led the Jefferies analyst stated in a note that “We upgrade our estimates for the U.S. sports betting markets and see a $5 billion Ebitda opportunity. Current valuations of Flutter, GVC and William Hill do not attribute any material value for the U.S.,  in our view, despite scope for the U.S. to double group profits in five years.”

In addition, the market leader of New Jersey following its acquisition of FanDuel and Fox Bet, is ready to buy Canadian online gaming company “The Stars Group” last year to create the world’s largest online betting operator.

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