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Oct 1, 2020, 7 tweets

You People Have Lost Your Damn Minds Dept: All gambling revenues(casino, online, sports, pari-mutuel, Native American, etc.) in the USA will probably be less than $80B in 2020, growing 2% per year. Sports betting(less than $2B) is about 2% of the total.

(2) William Hill, the dominant UK online and sports betting platform is being bought for 2x revenue, and has 15% EBITDA margins.

(3) In 2016 the total UK sports betting “handle” (online and on-premise) was $12.3B, or less than 0.5% of GDP, and has NOT been growing. The same figure would be a handle of less than $100B in the US.

(4) For the LTM the Nevada sports betting “win” (revenue/handle) was 6% (online only 4%!).

(5) Here is the NJ online sports betting figures from last year’s football season(2019). A handle of $3.1B with the 7% win percentage.

(6) So...If we become a nation of mad sports punters (bettors) like the UK, which has had online gaming for years, the US sports betting handle might be $100B. This would yield a TAM of $5–10B, depending on your view of win %. Competition will probably keep it lower, not higher.

(7) With 20% EBITDA margins, which is generous given all the marketing spend we all see, the ENTIRE pre-tax profit pool is probably $1-2B at market maturity. Obviously, sports betting is not the story here. Online casino games is.

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