US Online Gambling Projections for 2020: Over $5 Billion

Published September 18, 2014 by Lee R

US Online Gambling Projections for 2020: Over $5 Billion

Morgan-Stanley projects huge online gambling growth if all 50 states regulate within six years.

According to the indication of current trends, Morgan-Stanley projects the online gaming market to balloon to $5.2 billion within six years.

If all 50 states were to approve online gambling, Morgan-Stanley says the figure could double to $10.7 billion. However, the firm was quick to explain the unlikelihood of this event actually taking place, in light of “limited chances” for Federal approval and the fact that only 39 states currently have Commercial or Tribal casinos.

Remaining Challenges

The challenge remains turning an online gambling venture into a profitable business, and provides the basis for the six year estimate.

Morgan Stanley explains that realistically it will take four years for online gambling ventures in so-called early-adopter states to reach maturity, and for their profit margins to reach Morgan-Stanley's long-run rate estimate of 25%. The online businesses also must pass something of a litmus test, as they cannot realistically expect to break even until the second year, so some additional fortitude is required.

In New Jersey state however, some operators have reached break even within ten months, so Morgan-Stanley's estimates could prove pleasantly conservative.

Adjustments

This estimate comes after Morgan-Stanley tempered previous estimates, which the firm deemed overly optimistic. Morgan-Stanley came out as more cautious after reported profits were lower than expected in other early adopter states, so that the cumulative figures Morgan-Stanley initially trotted out were adapted to be more realistic and helpful to investors and state offices alike moving forward.

See also

Mobile Gambling Just Keeps Growing, According to new Research and Markets Data


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