A Morgan Stanley report suggesting that online gambling revenue in the US could reach $10.2 billion by 2020 if all 50 states allowed it is rated as unlikely by the company itself.
In fact Morgan Stanley’s modeling of the future market has led it to cut its forecast for the US online gaming market to $1.3 billion for 2017 and $5.2 billion for 2020. It has previously forecast $3.5 billion and $8 billion respectively but now says that “growth has underwhelmed creating a ripple effect on new markets and end user demand.”
Morgan Stanley is still bullish on the online market but is less optimistic short term. “ We believe the US online benefit still exists and there is minimal value in stocks today from it. The company tips 888 “for those who want exposure.”
Currently internet gaming is permitted only in Nevada, New Jersey, and Delaware, but Pennsylvania and California are considering it. However Morgan Stanley says the entrance of PokerStars into the New Jersey market – expected before year end – will accelerate growth, citing PokerStars’ entrance into the Italian online poker market which then grew by 62 percent in the first year after entry.
Morgan Stanley’s forecasts are based on more US states passing legislation to permit online gaming, with the figure of $1.3 billion based on seven states allowing internet gaming while the $5.2 billion figure is based on 20 states allowing it. If all 50 states were to allow it, its forecast for online gaming revenue rises to $10.7 billion but the company says this is “unlikely.”