Sports betting stocks: Canadian single-sports betting approaches legalization
June 22 was Canadian single-sports betting’s final major step towards legalization — passing the Senate — and legalization could come as early as this summer.
- Canadian sports betting company, Score Media and Gaming (NASDAQ:SCR), jumped 10% on the news.
What’s the big deal? In Canada, it’s estimated that $14b each year is spent on offshore websites. Legalization would bring these sales through the legal system — benefiting Canadian companies and increasing tax dollars.
- Following American footsteps, the Canadian federal government introduced a bill to legalize single-events sports betting in Nov 2020.
- And now, we’re about to see a potential CAD $2.4b market open up within the first 2 years — according to PwC.
Wasn’t it legal before? Sort of. Parlay betting, which involves betting on several outcomes, was already legal. But parlay bets make up just an estimated 3.4% of all Canadian sports bets. With legalization, these Canadian sports betting companies stand to gain:
- Score Media and Gaming, recently listed on the US stock market, already runs its sports betting app in 4 US states — and is best positioned to benefit from Canadian legalization.
- Bragg Gaming Group (TSE:BRAG), a Canadian-owned casino, sports betting and lottery software company, is also looking to list on the US exchange.
Nuvei (TSE:NVEI), a Canadian payment processing company, also stands to gain from sports betting. In April 2021, Nuvei acquired a gaming and sports wagering payment platform for $56m. Since going public in Sept. last year, its stock is up 109%.
Who’s eyeing the market? US sports betting companies. DraftKings (NASDAQ:DKNG) is expecting 10-20% market share in Canada — and was even rumored to buy Score Media and Gaming early this year.