Friday April 12, 2013 : LEADING ANALYST CONSIDERS ONLINE GAMBING IN THE U.S.
Morgan Stanley bullish on prospects for Boyd in online gambling
The influential top investment analyst firm Morgan Stanley appeared bullish on internet gambling prospects in the United States this week, predicting that by 2020 the industry in America will be as big a business as today’s real-world gambling centres of Las Vegas and Atlantic City combined…and the company avers that that is a conservative estimate.
The assessment came as part of a study on Boyd Gaming, a land casino company which has been among the early adopters of legalised online gambling by partnering with established overseas online gambling operators. Boyd's stock was given a big boost by the assessment, rising over 14 percent following the Morgan Stanley upgrade.
Morgan Stanley reported:
"In our base case (now factored into our BYD estimates), we model the legal US online gaming market to be ~$670 million in 2014, increasing to $9.3 billion in 2020 (55 percent CAGR).
"Put into context, by 2020, we estimate online gaming in the US to be the same size as the current Las Vegas Strip ($6.2 billion of gaming revenue in 2012) and Atlantic City ($3 billion in 2012) markets. Note the US online gaming market was estimated to be $5.3 billion ($7.5 billion adjusted for inflation) before it was banned in late 2006.
"We believe our market estimates are conservative."
The Morgan Stanley report contained an H2 Gambling Capital infographic which showed projected revenue increases to 2020 by the ten most likely states to legalise.