A positive development in the sports betting sector has investors juiced after the Massachusetts legislature passed a bill to authorize retail and online sports wagering on professional and collegiate sports.
The House and Senate had been going back and forth on the issue of college sports betting before compromising to allow college betting, but not on in-state schools unless they are playing in a major tournament like March Madness.
The MA tax rate will be 15% for wagers placed in person at retail betting locations and 20% for online bets. The taxes will be paid by the sports betting operators and not the betters themselves. The tax rates are significantly lower than those in some other states on the East Coast.
Union Gaming weighed in on the sports betting expansion news, saying there is a lot of revenue potential to go around. While Boston-based DraftKings ( NASDAQ: DKNG ) is an obvious beneficiary of sports betting being legal in its home state, and legacy DFS player FanDuel ( OTCPK:PDYPY ) is seen being in a strong position with a head start on targeting customer acquisition, analyst John DeCree also sees some other winners.
"We believe the state's commercial casinos are in strong standing, particularly PENN and Barstool Sports with somewhat of a home field advantage given Barstool's legacy in Boston and its popularity among the local college population, coupled with the retail presence at Plainridge Park."
DeCree also noted that MGM Resorts ( MGM ) and Wynn Resorts' ( WYNN ) commercial casino presence give it a significant advantage as well, having several years of key customer acquisition and brand awareness.
With all those established players already in the state, the market share breakdown could be very top heavy. However, Union Gaming thinks the development is a bright spot for the entire sector.
"With a favorable tax rate, and the potential size of the market, we believe today’s news is a major positive for the entire sports betting industry that has gotten brushed aside amidst a hectic earnings season."
DraftKings ( DKNG ) is on Seeking Alpha's Catalyst Watch this week with options trading implying a big share price swing when the company's earnings report drops on August 5.
For further details see:
Sports betting buzz: DraftKings, Barstool and FanDuel eye big paydays in Massachusetts