Entain PLC (LON:ENT) is the best bet for UK Investors playing the expected explosion in US online sports betting, according to broker Berenberg.
By 2025, gross gaming revenue (GGR) from sports betting in the US could be a US$15.9bn market with a further US$5bn in iGaming (online casino), says the broker.
Establishing a presence will not be cheap, Berenberg adds, with losses expected for the trio of Entain, Flutter and Draftkings in the early stages, but persistence will bring substantial rewards, the broker believes.
Flutter will remain the market leader, but Entain through its tie-up with MGM offers the most opportunity, said the broker in a note.
To succeed in the US, will require market access, product and technology, brand, access to customers, and marketing and promotional generosity.
In those regards, Flutter is the best positioned says Berenberg, followed by the joint venture between Entain and MGM, and third DraftKings.
On its estimates of the sports-betting and iGaming opportunity (and based on what is in the price for the US right now), Entain looks materially undervalued says Berenberg’ and is its preferred play.
“With its technology stack, the strength of the BetMGM brand, its broad market access and its established partnerships, we believe it possesses all the necessary characteristics to win a podium position in the market.
“Furthermore, while we expect a bid from MGM for Entain [It has had one offer rejected], even assuming the companies remain separate, Entain is still our top pick for the US opportunity.”
Entain shares eased 0.5% to 1,407p.