Casino Stocks Are Soaring After This Supreme Court Ruling
The United States Supreme Court made a landmark decision recently which has caused casino company stock to soar. The ruling overturns a previously upheld federal law which bans people from gambling or otherwise placing bets during individual sports events. Doing so has opened a potential four billion dollar market to the casino industry, and shareholders are taking note. Both in-person casinos and online gambling sites have seen jumps in their stock prices.
The original law was passed in 1992 and outlined guidelines that required states to outlaw certain forms of gambling. The Supreme Court ruled that this was an example of federal restriction of individual states' rights, and therefore the federal law was unconstitutional. Right now, the only state that has legalized individual-game betting is Nevada, but new sports gambling is expected to start within weeks in New Jersey. The state of New Jersey began the original legal fight when it repealed its prohibition on gambling.
The slot-machine creator Scientific Games saw their stock climb thirteen percent after the ruling. The largest casino operator in the United States, Caesars, had their stock rise 7.1 percent. Some online operators that previously allowed betting on international sporting events are also seeing their values climb.
This isn't just a United States phenomenon, either; the ruling is also having international effects on gambling shares. William Hill Plc is a gambling operator stationed in the U.K. whose shares rose eleven percent after the decision was announced. This company carries the largest sports book number in the state of Nevada. Meanwhile, the Canadian company Stars' shares climbed fifteen percent.
MGM is the biggest company owner of casinos across the Las Vegas Strip. The company's shares increased by 3.5 percent. Last week, MGM presented its future plans to potential investors. The future plan includes an increase in Las Vegas professional sports and an increased MGM presence across the nation, both in casinos and online. MGM hopes to claim some of the attention of new gamblers through its brand recognition.
The decision was expected to have wide financial impacts, but the stock increases are unprecedented. Some experts predict that sports betting could become a four billion dollar industry within the next five years; that number will climb even higher if more states adopt it.
Changes in betting options will first be seen in the states that already allow sports betting. These include West Virginia, New York, Pennsylvania, and New Jersey. Experts doubt that new states will change their legislation regarding sports betting this year, given the time it takes to draft regulations, but they also expect to see new legislation moving by next year.
The only place that may suffer a potential setback due to the ruling is Las Vegas. Right now, individual sports betting is legal in Nevada alone. Due to the Supreme Court ruling and the legalization of individual sports betting in other states, Nevada will lose its sports betting market monopoly. Las Vegas casinos plan to move quickly, racing against regional casinos in New Jersey and Pennsylvania that are establishing a hold on the new market.