Online Casino Companies
The Top Online Casino Companies In The United States
Online payment services are also riding the wave of the Internet casino craze making it profitable to work for these companies as well. Look into job opportunities with the companies that are used for secure banking methods for Internet casinos and gamblers. Let’s talk about casino software. Hey, don’t roll your eyes – casino software is an important topic. Casino software impacts so much of your experience online: the games you can play, the odds you get, the rules you have to follow, table limits, and so much more.
by Matias Dorta / October 21st, 2020
Picture By Morning Brew
This blog is not a recommendation to buy or sell securities.
What is iGaming?
iGaming, otherwise known as online gambling, consists primarily of two sectors, sportsbook and online casino. Placing a bet online on the outcome of a sports match, playing online poker with friends, or trying your luck at a virtual craps table would all fall under the category of iGaming, with the first example categorized as “sportsbook” and the last two examples categorized as “online casino”.
Needham sees the U.S. online sports betting and gambling opportunity between $42 and $58 billion annually longer-term. Grand View Research expects a CAGR of 11.25% for iGaming leading into 2025. Why is the industry experiencing explosive growth?
- The rapid expansion of smartphones and tablets have made internet gaming more accessible.
- Many states within the U.S. have either legalized online gaming or are on the path towards legalization.
- Online gaming brings the excitement of a casino directly to the user’s home. Morgan Stanley expects over 75% of U.S. sports bets to be placed online based (versus land-based) by 2025.
As previously mentioned, iGaming consists of two sectors, sportsbook and online casino. In the second quarter of this year, online casino revenues tripled from the prior year with revenues surpassing $400 million. The growth in online casinos is primarily due to user demand for a digital experience, COVID-19 complications around brick and mortar casinos, and new states legalizing online gambling products.
source: PlayUSA.com
At the moment, online casinos are legal in New Jersey, Pennsylvania, West Virginia and Delaware. Early results from legalization highlight that user demand is strong:
- West Virginians placed nearly $50 million in legal online wagers within the first four weeks of legislation.
- Online casinos brought in over $81 million in June 2020 in New Jersey alone.
- In Pennsylvania, online casinos saw revenues of $51 million in July 2020 and total wagers on slots surpassed $1 billion for the third consecutive month.
The U.S. opportunity for online casinos is significant. Despite strict regulations, the legacy US gambling industry still makes a total contribution of around $137.5 billion to the U.S economy annually and directly employs more than 730 thousand people (according to Statista). This figure also doesn’t take into account the assumed $150 billion wagered off-shore due to legal complications in the United States. As regulations improve, online casinos are well positioned to attract users and take market share in this growing industry.
Top U.S. Online Casinos
Let’s look into the biggest players in the U.S. online casino market based off of GGR market share from the three months ending October 31st, 2020. GGR, or gross gaming revenue, is the difference between the amount of money players wager minus the amount that they win. This is a key metric for the gaming industry and reflects the “sales” or “revenues” for online casinos.
The rankings below are based on data from Eilers & Krejcik Gaming on U.S. online casino operations. The rankings only reflect GGR market share from U.S. online casino operations three months ended October 31st 2020 and do not include data from sportsbook operations.
1. DraftKings
DraftKings is number one on the list with 16% of the U.S. online casino GGR market share. DraftKings, famously known for daily fantasy sports, is also becoming a dominant player in the U.S. online casino market. The company operates online casinos in New Jersey, Pennsylvania, and West Virginia. In its first month of business in West Virginia, DraftKings Casino brought in 75% of the $50 million in total online wagers for the state. According to DraftKings IR, their online casino app now offers over 360 different games.
Related Companies: DraftKings
2. SugarHouse-Rivers
SugarHouse-Rivers is number two on the list with 16% of the US online casino GGR market share. Sugarhouse-Rivers Casino is owned by Rush Street Interactive. The company operates online casinos in Pennsylvania and New Jersey. SugarHouse Casino was one of the first casinos to apply for an online gambling license in PA. The Pennsylvania Gaming Control Board approved the license in 2018, allowing SugarHouse to offer online slots, tables games, and poker for Pennsylvania residents and visitors.
Related Companies: Rush Street Interactive
3. Betfair-FanDuel
Betfair-Fanduel is number three on the list with 15% of the U.S. online casino GGR market share. In 2018, Paddy Power Betfair and FanDuel merged their U.S. businesses. Together, they operate online casinos in Pennsylvania (FanDuel operation) and New Jersey (Betfair operation). Both companies are owned by their parent company, Flutter Entertainment. Flutter is an online gaming powerhouse with over 13 million customers worldwide. Other notable brands under the Flutter umbrella include Full Tilt Poker, PokerStars, SkyBet, and FOXBet.
Related Companies: Flutter Entertainment
4. ROAR
ROAR is number four on the list with 13% of the US online casino GGR market share. ROAR Digital is a joint venture between MGM Resorts International and GVC Holdings and consists of the BetMGM, Borgata, PartyCasino, and PartyPoker brands. According to ROAR Digital’s CEO, BetMGM is on track to generate over $130 million of net revenues this year, predominantly from iGaming (online casino) in New Jersey, given the impact of COVID-19 (i.e. lack of live sports). ROAR Digital has live online casinos in New Jersey and West Virginia under the BetMGM brand and plans to enter the Pennsylvania market this year.
Related Companies: MGM, GVC
5. Golden Nugget
Tilman Fertitta’s Golden Nugget online casino comes in at 5th place. At the moment, Golden Nugget operates its online casino exclusively in New Jersey, where they are a market leader. The company saw record high user activity in the third quarter and may surpass $100 million in GGR in New Jersey in 2020. The company recently received approval from the New Jersey Casino Control Commision to complete its merger with the SPAC Landcadia Holdings II.
6. PokerStars
PokerStars is number six on the list with 5% of the U.S. online casino GGR market share. Like BetFair-FanDuel in the number two spot, PokerStars is under the Flutter Entertainment umbrella. The popular European poker website launched in New Jersey in 2016. PokerStars offers users access to online poker, slots, and casino games in New Jersey.
Related Companies: Flutter Entertainment
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In an interview with MarketWatch in 2002, the late Hunter S. Thompson said the only stock he ever bought was in the Boston Celtics. But in 2020, perhaps Thompson might reconsider, since the hot trend appears to be US online gambling operators becoming publicly traded companies.
Everything came to a roaring halt when the coronavirus ravaged the US. Sports and sports betting were all but nonexistent. It started with March Madness and then spread like a fever to other leagues. By April, your betting options were Russian table tennis and Belarusian soccer. When the US Supreme Court put an end to the Professional and Amateur Sports Protection Act (PASPA), it unknowingly opened the doors to gambling talks inside state capitals.
But in the last few months, it’s not the legalization of sports betting that’s been receiving widespread attention, but rather, well-established gaming companies taking their online business public. Online casinos are making record profits during the pandemic, and a few significant companies are pouring investment money into online segments, betting on long-term gains.
However, investing in online gambling can be just as rewarding as betting on the Boston Celtics to sweep the lifeless Philadelphia 76ers. It can also be as dangerous as betting on them to do it again against a more formidable foe.
Here’s a look at three high-profile companies leading the charge.
DraftKings leading the crusade
This all started in April when popular daily fantasy sports (DFS) turned sports betting operator DraftKings (DKNG) debuted on Wall Street. The company’s opening price of $20.49 rose to an all-time high of $44.70 and is currently hovering around $38.91 as of 10:26 CST.
The company is known to suck the air out of a room. DraftKings Sportsbook is the leading sports betting operator, and whenever it does something as drastic as becoming a publicly traded company, others pay attention.
In its most recent earnings report, DraftKings said, “The company is well-positioned to continue to deliver on its key priorities, which include entering new states at the earliest opportunity, investing in product and technology to create new offerings for American sports — and acquiring and retaining customers.”
We don’t need to sit here and ramble on about the inner workings of DraftKings. The company knows DFS, it knows sports betting, it has a huge customer base and it has the potential to become sports betting/online gambling royalty. It is also in online casinos now.
The level of success DraftKings has been able to achieve in the two years since the repeal of PASPA is unmatched. But in doing so, it placed a giant target on its back, with other operators looking to overtake the behemoth.
Golden Nugget is a leader in online casino gaming
Sometimes, when you have a game plan, you want it to be a secret — like when the Arkansas Razorbacks unveiled the Wildcat formation to utilize their three-headed monster, running backs Darren McFadden, Felix Jones and Peyton Hillis. Not only did they take other teams by surprise, but Arkansas also managed to finish the ’06 season 10-4.
Online Gambling Companies Stocks
This was not the case for Golden Nugget — no secrets here. The company revealed its strategy to break off its online gambling arm and list it on the Nasdaq exchange.
Golden Nugget is the largest online casino in New Jersey and posted a net income of $11 million in 2019. The company also plans to launch online casino games in Pennsylvania and Golden Nugget sportsbook in Michigan in 2021.
In a transaction plan similar to DraftKings’, Golden Nugget’s online gambling business will be acquired by Landcadia II, a publicly listed special purpose acquisition company (SPAC).
Once the deal is complete, Landcadia II will change its name to Golden Nugget Online Gaming Inc. (GNOG).
The move is genius. What Golden Nugget does best is online casino games. When it becomes a publicly traded company, owner Tilman Fertitta can raise additional funds at a time when COVID-19 has crippled land-based operations.
In football terms, this move screams “We are going to run the ball right down your throat — try to stop us.”
Rush Street Interactive taking a page from its rival DraftKings
If it works for your competitor, it just might work for you. That appears to be the mindset of Chicago-based Rush Street Interactive, as it too will become a publicly traded company once its deal with dMY Technology Group is complete.
247SportsInteractive B.V.
Rush Street has a tally of first-to-market achievements under its belt. It was the first company to launch online casino gaming in New Jersey and the first to launch online sports betting in Pennsylvania, Indiana, Colorado and Illinois.
According to the Chicago Business Journal, the transaction value of the combined companies will be around $1.78 billion. Once the transaction is complete, dMY Technology will change its name to Rush Street Interactive Inc. (RSI).
The move is not surprising and is a product of a rapidly changing industry looking to compete with top operators like DraftKings and FanDuel.
MGM Resorts and the value of investment
Lastly, we have MGM Resorts and the 10-figure investment from billionaire Barry Diller due to the outlook on online gambling. Diller’s company, InterActive Corp, purchased a 12% stake in MGM worth around $1 billion.
In a Fox Business report, Diller said the online gambling industry is worth $450 billion on a global scale and he has been looking to enter the online space for some time.
The substantial investment helps reinforce the narrative that online gambling is where the industry is heading. New Jersey online casinos recorded $84.9 million in revenue for June. Pennsylvania netted $55.8 million, and some market analysts anticipate Michigan’s online gambling value to be worth more than either of them.
The US stock market is extremely volatile and continuously in flux. To that extent, it might be wise to stick with Thompson’s advice and back the Celtics. They swept Philly 4-0 and now take on the defending NBA ChampionToronto Raptors in a best-of-seven series beginning Thursday, Aug. 27.