Of the millions of San Francisco 49ers, Kansas City Chiefs and NFL fans in general that will sit down to watch the 54th Super Bowl on Sunday, many are looking to cash in on the world championship game thanks to the rise in sports betting in the U.S.
Bank of America said sports betting could reach 50% of the U.S. population by 2022. While sports betting revenue was about $950 million in 2019, estimates for the booming industry's future range from $6 billion to $20 billion.
"We think the success, adoption and technology behind online and mobile sports could be a catalyst for wider iGaming penetration, a notable shift for an industry that has thus far not been widely impacted by the Internet," Bank of America research analyst Shaun Kelley said in a note to clients on Friday.
Sports betting and online gaming have been some of the hottest topics in investor conversations, Kelley said. Daily fantasy sports company and bookmaker DraftKings reached a deal to merge with Diamond Eagles Acquisition group in December, allowing the company to become public while forgoing the typical IPO process. On Wednesday, casino company Penn National Gaming's stock soared 12% when it announced it's taking a 36% stake in digital sports media company Barstool Sports for about $163 million in cash. The deal, which values Barstool around $450 million, is expected to close in the first quarter of 2020.
"We view this partnership positively and expect that it will quickly transform PENN into one of the major players in sports betting," said Kelley.