9 Stocks To Watch For Ohio's Sports Betting Market, Which Could Hit $12 Billion

Another state legalized sports betting and it could be one of the largest markets nationwide. Here’s a look at what legalization for Ohio looks like and what companies could benefit from the recently passed legislation.

What Happened: Ohio legalized sports betting last week, a move that brings another top 10 state by population into the legalized states mix.

Estimates from PlayOhio say the state can generate $12 billion in annual wagers and $900 million in gaming revenue at maturity, which could be hit in the state’s full third year.

“Ohio is a large state that has embraced an open model, which will make it immensely attractive to both national and local operators,” PlayUSA.com analyst Eric Ramsey said.

Governor Mike DeWine has signed the bill into law. Sports betting will launch in Ohio by a January 2023 deadline and could come as early as mid-2022.

Ohio ranked seventh in the 2020 Census with a population of 11.8 million residents. Other top 10 states that have legalized sports betting include Illinois and Pennsylvania, which ranked second and third for annual sports betting handle.

Industry experts see Ohio having advantages for the sports betting market as the home of nine professional franchises and 13 colleges with Division 1 athletes.

“The state’s landscape and residents’ affinity for land-based gambling, which has benefitted sportsbooks in neighboring states such as Indiana, also bodes well for the future of sports betting in Ohio,” PlayOhio lead analyst Matt Schoch said.

One thing that could hurt Ohio is the legalization of sports betting by the majority of its neighboring states, which could mean not as many out-of-state residents coming to bet there.

Related Link: Analyst Raises TAM For Online Sports Betting, Highlights A Few Big Winners 

Ohio Winners: Sports betting in Ohio will allow 46 online sports wagering sites and apps and 40 retail sportsbooks, according to PlayOhio. Previous Ohio sports betting bills limited activity to the existing casinos and racinos in the state.

Different types of licenses will be allowed in the state with casinos, racinos and the state’s professional sports teams having easy access to licenses and additional skins.

Among the first companies to announce a move for the state of Ohio are Rush Street Interactive Inc RSI and Hall of Fame Resort & Entertainment Company HOFV, which announced a deal last week. The deal will see Rush Street’s BetRivers brand operate a retail sportsbook at Canton’s Hall of Fame Village in a ten-year agreement.

“With the legalization of sports betting in Ohio, we see a variety of opportunities and benefits across our Company’s multiple business lines,” HOFV CEO Michael Crawford said. The CEO noted that many retail sportsbook operators were considered.

A company that could benefit from the Ohio legalization is Penn National Gaming, Inc PENN, which owns two casinos and three racinos in the state. The company will likely launch the Barstool Sportsbook app in the state and could benefit from holding key licenses and skins it could sell or license out to other operators. If each physical location gets two online skins, PENN could have “10 golden tickets” according to sportshandle.com.

FanDuel, a unit of Flutter Entertainment ADR PDYPY, will get access to Ohio via a market access deal with Boyd Gaming Corporation BYD, which owns the state’s Belterra Park Gaming & Entertainment Center.

Draftkings Inc DKNG will have access to the state of Ohio via a market access deal with Penn National and the Hollywood Casino Toledo.

Caesars Entertainment Inc CZR owns the Eldorado Scioto Downs Racino, which will get the company access to the online sports betting market. The company will likely launch the Caesars Sportsbook in the state and could open a retail sportsbook as well.

MGM Resorts International MGM owns MGM Northfield Park in Ohio and will have access to bring its joint venture BetMGM brand to the state.

Churchill Downs, Inc. CHDN could be a winner in Ohio. The company owns the Miami Valley Gaming facility and could launch its online sports betting brand TwinSpires in the state. TwinSpires is currently in five states and could be a growth item for Churchill Downs and a potential spinoff or acquisition catalyst down the road.

Image by Peter Lomas from Pixabay