DraftKings debuted as a publicly traded company on Friday, April 24, 2020, and it has since seen its … [+] If someone had told you at the beginning of 2020 that, by March, global sports would largely shut down, with a slow resumption not happening until the summer of […]
Surprisingly—given the almost nonexistent sports landscape in 2020—DraftKings is not an outlier among sports gambling operators. Back-end business-to-business supplier GAN Limited, which provides iGaming software to the U.S. land-based casino industry (boasting Borgata, Parx Casino, Maryland Live!, and Jack Entertainment amongst its partners), also had its IPO during the pandemic, opening at a price of $8.50/share on NASDAQ in early May. Much like DraftKings, GAN’s share price has skyrocketed since its debut, closing at $25.69/share on July 10.
Enthusiasm for iGaming and sports wagering in the U.S. market has not only taken the form of companies making their debut on public markets. Indeed, last week, ROAR Digital—the joint venture launched in 2018 between MGM Resorts International and GVC Holdings that offers sports betting and online gaming products in the U.S. as BetMGM—announced that MGM and GVC were investing additional funds in the venture. The added funds will bring their initial commitment of $200 million up to $450 million. BetMGM states that it is on pace to operate in 11 states by the end of the year.
If anything, the coronavirus pandemic has highlighted the success and versatility of online gaming, as both investors and the public at large have realized that iGaming does not just mean sports wagering. They see that iGaming also encompasses such other offerings as online casino, online poker, esports, and horse racing, all of which have managed to thrive during the time in which much of the country and world stayed indoors. Indeed, the clear market enthusiasm evidenced by the market debuts of DraftKings, GAN, and Golden Nugget (not to mention last week’s BetMGM news) has led to significant speculation as to which additional sports wagering and/or iGaming entities may be slated for a public offering in 2020 or early 2021.
Another company potentially ripe for an IPO is Epic Games—the creator of the smash hit video game Fortnite. CB Insights counts Epic Games amongst its list of “unicorns,” or private companies with a valuation of $1 billion or more. Although Epic Games more closely resembles a traditional video game company as opposed to a gambling operator, the potential for synergy with iGaming or other online gambling entities is present. This is especially true with the rise of betting on esports, which has been cleared for legal wagering in Nevada, New Jersey, Tennessee, and West Virginia.
With no shortage of iGaming businesses succeeding in the face of uncertainty in 2020, and considering the initial success of DraftKings, GAN, and Golden Nugget following their offerings, it will be fascinating to track the iGaming industry as a whole—with an eye toward new market entrants—in the post-pandemic world.