On Monday, the Supreme Court overturned PASPA (the Professional and Amateur Sports Protection Act that effectively banned commercial sports betting in most states), opening the door to legalizing the estimated $150 billion in illegal wagers on professional and amateur sports that Americans make every year. (New York Times)
We immediately jumped into Sentieo to see how various companies were taking the news. We pulled up a search for “PASPA” and its synonyms.
Mentions of PASPA in documents have certainly spiked in the last 3 months as companies have been eagerly awaiting the announcement:
We looked at the companies mentioning PASPA the most in their documents and found a few companies that will likely see positive impacts. They include:
- William Hill – bookmaker based in London that is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index
- Stars Group – Canadian gaming and online gambling company traded on Nasdaq and the Toronto Stock Exchange
- 888 Holdings – headquartered in Gibraltar, one of the world’s most popular online gaming operators & platform providers
- MGM Resorts International – American global hospitality and entertainment company
- Sportech PLC – online gambling and entertainment company headquartered in the United Kingdom, traded on the London Stock Exchange under the symbol SPO
Here is the stock of Stars Group, with a large spike on May 14th:
All of these companies, except for MGM, had massive gains on Monday as the news hit the wire.
We dug a bit deeper into the MGM documents, and a May 10th Analyst day presentation caught our eye. Here’s a close-up:
On the call, MGM Chairman and CEO James Murren beat his chest on (correctly) predicting the outcome of the PASPA decision and tries to show that MGM Resorts’ primacy in the sports market and the overturning of PASPA would be a massive opportunity for the company. The accompanying slides from the presentation outlined the opportunity.
MGM was eagerly awaiting the PASPA announcement and is sure to already be pouncing on the opportunity to become even more of an “undisputed leader in sports.”
Unfortunately, for the company, the stock has not moved up accordingly since Friday. This is either a terrific investment opportunity, or a hope unrealized.