Macquarie online gaming analysis
Happy birthday to you: On the third anniversary of the fall of PASPA, the gaming team at Macquarie have issued new analysis which puts forward a new estimate for spend per adult of $60 in mature states rather than the previous estimate of $50. Why does this matter? According to Macquarie’s modelling it means the market will be worth $10.5bn by 2025 and $15bn by 2030. Meanwhile, they also estimate spend per head in states where iGaming is regulated to be $150 per head. The OSB/iCasino combination “packs a powerful punch,” they suggest.
Great barrier grief: That said, due to the “every snowflake is different” regulatory patchwork, whether that is limitations on the number of skins available, variable tax rates or the complications caused by tribal involvements (see below), it means no state is the same. “As a result, we believe the varying regulatory landscape raises the barriers to entry for multi-state operators.”
Tiers are not enough: An interesting table put together by Macquarie shows the prominent sports-betting brands have high-end market share targets that total 155% of the market. Even at the lower end of their combined market share figures they would claim 111% of the market. Clearly something has to give – particularly given that in most states these leading brands are far from being the whole market – but that something is unlikely at least at present to be marketing spend. As the Macquarie team pointed out, with operators expecting “healthy” expected LTVs “it is safe to say ‘wallets are open’.” This will lead to losses for the largest operators of as much as $100m-$300m in H221.
Additional topics available today on Earnings + More:
