Goldman Sachs Bullish on Online and Sports Betting Growth Surpassing E-commerce

Nitara4779

According to a report by the U.S. investment bank Goldman Sachs, the American online casino and sports betting market is one of the most significant consumer-related sectors, expected to achieve an impressive Compound Annual Growth Rate (CAGR) in the next decade. Goldman Sachs cited favorable legislative environments and growing consumer interest as factors driving market growth and presented an optimistic overall market size estimate for online gambling and sports betting markets in the U.S. to date.

Goldman Sachs stated in its report to clients, ""We anticipate a favorable legislative environment and consumer adoption to drive the U.S. online sports betting and internet gambling market from the current annual $9 billion/$15 billion to $39 billion/$14 billion by 2033, representing a more than ten-year 40%/27% CAGR."" This sports betting market forecast not only stands at a relatively high level compared to forecasts by other research institutions but also exceeds some operators' estimates. For instance, DraftKings (NASDAQ: DKNG) recently stated during an investor day event that they believe the U.S. online sports betting market could be worth $22 billion within a few years, assuming full legalization.

Traditionally, gaming companies have been classified as consumer discretionary sectors, a perspective that is more compelling to investors and operators with Goldman Sachs' presented viewpoint. The bank notes that the aforementioned 40% and 27% CAGR estimates allocated to online sports betting and internet casinos far exceed the 18% CAGR forecast for e-commerce over the next decade (excluding online travel bookings). To further put these forecasts in context within the gaming sector, the bank states that no online retail category will have a CAGR exceeding 22% during this period.

Indeed, the internet is a significant driver of Wall Street's widespread enthusiasm for sports betting companies. Physical sportsbooks are low-margin businesses, while online operators face lower fixed costs. Goldman Sachs noted, ""Importantly, sports betting and internet gambling have no physical distribution centers, so capital requirements are significantly lower, especially when comparing different categories of online and offline equivalent products. As a result, the return potential on invested capital may be much higher than other physical product categories, making the diminishing marginal more moderate."""

Kapil334

Compared to forecasts from other institutions, Goldman Sachs' predictions for the sports betting market are higher, even surpassing estimates from some operators. This suggests that investors and operators may have even more significant interest in this industry. Furthermore, the importance of the internet in this field is one of the primary reasons why Wall Street is enthusiastic about sports betting companies. Online operators have lower fixed costs and smaller capital requirements, which bring higher return potential for investments. It appears that there will be an exciting competition in the future for the online casino and sports betting markets!

Indra55

Online gambling is becoming increasingly popular among more people.

Sahana34494

In this era of advanced technology, many people are using the convenience of the internet to make money.

gopal

I think this is an overestimation. E-commerce is still the mainstream, while online gambling may not have the same potential.

gulab

The premise is that the country truly opens up this industry.

Janak9955

There's nothing surprising about exceeding it either.