Morgan Stanley’s Optimistic Outlook on US Gambling Industry

Global investment bank and wealth management firm, Morgan Stanley, has released its outlook on the US gambling industry for the year. The firm highlighted the potential for significant growth in the consumer discretionary sectors, particularly in online revenue, with a projected 17% compound annual growth rate (CAGR) from 2023-2026.

However, Morgan Stanley also noted that the slow legislative processes in 2024 and 2025 could dampen the growth of the online casino world, leading to a leveling off after a period of strong growth.

The firm’s analysis also included rescheduled launch dates for various online sports betting and casino markets in different states. North Carolina, Maryland, Colorado, and Indiana all had their launch dates pushed back, impacting the firm’s total addressable market forecasts for sports betting and iGaming from 2024-2026.

Morgan Stanley’s analysts also commented on the spending levels for online sports betting in the US, noting that they have already surpassed those in the UK and are approaching the figures seen in Australia. The firm expects these numbers to continue to grow and potentially exceed the spending levels in mature markets.

In terms of stock recommendations, Morgan Stanley mentioned DraftKings and Las Vegas Sands as preferred stocks, with strong price targets. The firm also highlighted Fanatics as a newcomer in the sports betting world to watch due to its popular sports brand and powerful tech stack.

Morgan Stanley also predicts that industry leaders like FanDuel and DraftKings will continue to dominate the market through their scale advantages, while challengers like Flutter, bet365, and ESPN Bet raise concerns about profit margins and promotions.

Finally, the article mentioned Gateway Casinos’ enlistment of Morgan Stanley’s financial services and Macquarie Group Ltd. to find investors or acquirers for its properties, showcasing the firm’s influence and expertise in the gambling industry.

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