Exploring the Rising Potential of iGaming Revenue Growth

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00:00All right, so as you mentioned, as you mentioned, now this is where perhaps some money can be

00:10made for the operators to sort of deflect this 51% and that would be in iGaming.

00:15Now how would this work as far as the revenue is concerned?

00:18Because they would, you know, naturally more people are betting on iGaming and it's growing,

00:23but how would that exactly work in terms of benefiting that?

00:27Well, if you're talking about what the tax rate, Craig, you know, iGaming is taxed differently

00:33in the seven or so jurisdictions that we have it in the U.S.

00:37Pennsylvania, for example, taxes it the same way that they tax the games at retail casinos.

00:42So the slots and tables, they pay the same rate.

00:46These operators have a chance with New York to try to get that down.

00:50And look, they came into this saying sports betting is low margin.

00:55iGaming is higher than that.

00:56We know that iGaming can make money.

00:58It's still not huge margins, but the amount of money that rolls into iGaming, the handle,

01:05the drop is much more than sports betting.

01:08So, you know, we're looking at iGaming and sports betting around the country and Chad

01:13Bainon of Macquarie actually just raised his expectations for what operators will report

01:19in the second quarter.

01:20And he thinks online revenue grew 34% in the second quarter.

01:25And that is updated from his model of 21%.

01:30You know, it was an interesting second quarter.

01:34Slower, of course, it always is.

01:37But we had some interesting battles in the NBA playoffs.

01:40And, you know, we have these other operators now, the ESPN bet, the Fanatics.

01:46We have Bet365 entering new states.

01:49And so we want to see the slower months still growing, right?

01:54We want to see the older states still doing their part and still adding more customers

02:02and seeing their customers betting more.

02:04At the same time, you want these operators to still be lowering their promotional spending

02:10and getting to that profitability line, right, Craig?

02:13And so Chad thinks that three sportsbooks are in good shape, DraftKings, FanDuel, and

02:20BetRivers.

02:21He thinks that they're set up nicely to outperform in the second quarter.

02:25And based on New York, right, you can look at those numbers and they report by operator.

02:29It gives you an idea of what the larger market overall might be looking like.

02:34Chad said that he's a little wary on what the hold could look like for BetMGM and Caesars.

02:42So, you know, right now, we are still seeing growth in iGaming and sports betting.

02:49But obviously that growth could be a whole heck of a lot more for iGaming if more states

02:53jumped on.

02:54And New York is one of those states that people are looking at to possibly do it next year,

03:00Craig.