With land-based casinos all across the country closed and sports betting drying up during the COVID-19 lockdown, online casinos have had one heck of a run. Excluding sports betting, internet gambling revenues in New Jersey rose to $65 million in March 2020. This marks a 66% increase compared to the previous month, according to reports from the state. New Jersey is one of the nation’s leaders in online gambling, with sites offering slots, as well as poker, blackjack and other table games.
Thomas Allen, a Morgan Stanley gaming analyst, believes that the impact of the coronavirus lockdown could motivate more states to legalize online gambling. There are only a handful of states which currently allow online casino gambling, including Nevada, Pennsylvania, and New Jersey. The situation is a bit brighter for sports gamblers, as more than 15 states permit online sports betting, while the practice is allowed in physical casinos by even more states.
According to Allen, online casino revenues in New Jersey are on track to go beyond $700 million by the end of 2020 — a notable increase compared to $483 million the industry generated in 2019. He believes that this increase comes from the fact that bettors are moving from traditional brick-and-mortar casinos which are closed during the pandemic.
When it comes to sports betting, however, the story is markedly different. There are very few open markets, as sports are suspended all over the world. The most devoted sports fans can still bet on Belarusian soccer, Taiwanese basketball, Russian table tennis, or darts. Thankfully, many governments around the world have begun considering the return of sports, and it seems like it won’t be long until games are played in the Serie A Calcio, German Bundesliga and the English Premier League.
DraftKings Goes Public
Despite the online sports betting collapse in recent months, investors remain interested in Diamond Eagle Acquisition (DEAC). This acquisition company is set to merge with internet sports betting giant DraftKings. Diamond Eagle shares are up about 50% in 2020, rising rapidly after the announcement of the merger in late 2019. The lack of sports in the last couple of months did not stop the merger from going forward, and the two companies merged after Diamond Eagle shareholders voted on the decision on April 23.
This means DraftKings is now a publicly-traded company, making its debut on the market against an unprecedented backdrop of an athletic shutdown. Sports gambling platform provider SBTech was also involved in the merger, creating a new company with an initial market value of $3.3 billion.
Future Looks Bright
The merged company will be run by Jason Robins, DraftKings CEO and co-founder. Robbins believes that, despite the current situation, the long-term prospects of sports gambling remain strong. He also thinks the company may end up benefiting from fans’ pent-up enthusiasm when sports return.
This optimism seems to be shared by George Soros who belongs to a group of big-name investors who bought shares in DraftKings since the merger. An investment fund managed by Soros and his family reportedly holds 2.7 million DraftKings Class A shares, worth around $66 million.
The list of investors that DraftKings has been able to attract since going public includes big names like Dallas Cowboys owner Jerry Jones, New England Patriots owner Robert Kraft, and Madison Square Garden Entertainment Corp.