MGM, casino stocks jump after Supreme Court says states can legalize sports betting

Brian Spurlock | USA TODAY Sports | Reuters

Several casino stocks jumped after a U.S. Supreme Court ruling paved the way for states to legalize sports betting if they so choose.

Shares of MGM Resorts, Caesars Entertainment, Boyd Gaming, Penn National Gaming and Churchill Downs all popped on the decision, although they were well off their highs immediately following the case result.

Scientific Games, an online sports betting tech company, was on track for its best day since July 25, 2017, up more than 10 percent.

The Supreme Court ruled in favor of New Jersey in the case of legality of a 2014 law permitting sports betting at casinos and racetracks in the state. The ruling voided the federal Professional and Amateur Sports Protection Act.

The ruling will break up Nevada's monopoly on the practice. Illegal sports betting is worth billions of dollars annually. Some states see sports betting as a potentially source of tax revenue.

The Court's decision opens doors to potentially allow legal sports betting in numerous states, possibly nationwide.

Kentucky Derby operator Churchill Downs' CEO William Carstanjen told CNBC earlier this month that he was betting on and hopeful for legalization.

"Sports wagering is a category we're very bullish on. We think that would be a great thing and we think our customers would like it," Carstanjen said.

Wynn Resorts and Las Vegas Sands, which are more leveraged to betting in Nevada, declined slightly following the ruling.