The gaming ETF climbed Monday after the Supreme Court ruled against a federal law that prohibited betting on sports events.
The VanEck Vectors Gaming ETF (NYSEArca: BJK), the only ETF dedicated to gambling and casino stocks, gained 2.0% Monday.
Gambling and casino-related stocks rallied Monday after the Supreme Court paved the way to formalize sports betting across the country. The court sided with a challenge brought by the state of New Jersey, which has undergone a six-year kerfuffle to allow sports betting within the state, the Wall Street Journal reports.
The Supreme Court’s decision reverses the lower-court’s ruling that blocked New Jersey from moving forward with its plans. The Supreme Court’s decision also paves the way for other states to follow suit and allow gambling on athletic sporting events viewed by millions of Americans.
“We believe in the next two years to three years, there are 10 to 12 states that are ripe and ready to activate on that,” MGM President William Hornbuckle told Bloomberg. “We will be there. We will participate in it. We bring technology. We bring knowledge. And frankly in this space, we bring trust.”
Supreme Court’s 6-to-3 Vote
The Supreme Court justices in a 6-to-3 vote overruled the 1992 Professional and Amateur Sports Protection Act, or Paspa, a federal law that said states couldn’t “sponsor, operate, advertise, promote, license, or authorize” sports gambling. Nevada is the only state where single-game wagering is now legal.
Paspa “unequivocally dictates what a state legislature may and may not do,” Justice Samuel Alito wrote for the majority, adding that “a more direct affront to state sovereignty is not easy to imagine.”
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A previous study from industry consultant Eilers & Krejcik Gaming LLC calculated that total annual revenue from sports betting at casinos and racetracks in all 50 states could amount to $7.1 billion, whereas adding online wagers would more than double the annual revenue to about $16 billion.
Carlo Santarelli, an analyst with Deutsche Bank Securities, estimated that the U.S. market for both online and in-casino sports betting could reach $4 billion by 2023, based on 13 states having adopted it.
States that have already passed legislation allowing sports bets, such as New Jersey, Pennsylvania, New York and West Virginia, could be among the first movers.
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