Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Scientific Games Corp Popped 15% Today

By Travis Hoium – May 14, 2018 at 2:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Supreme Court gave this gaming business a big win today.

What happened

Shares of gaming technology and services company Scientific Games Corp (LNW -2.41%) jumped as much as 15.3% in trading Monday after the Supreme Court opened the possibility of states allowing sports betting. Shares pushed higher throughout the day and were up 13.7% at 1:55 p.m. EDT. 

So what

The Supreme Court struck down a federal law known as the Professional and Amateur Sports Protection Act, which outlawed sports betting outside of Nevada. Now, any state could pass its own sports betting laws, which could mean betting at racetracks, casinos, or even online. 

Man betting on sports online.

Image source: Getty Images.

Scientific Games could be a winner from sports betting because it creates the infrastructure companies use to bet. Particularly in online formats, the company could become a leading supplier of technology used in sports betting. 

Now what

Sports betting opens up a market that could be worth billions for those who can capture a piece of the action. Nevada's Gaming Control Board said $4.8 billion was bet in sportsbooks in Nevada in 2017, with $248.7 million won by casinos. But the illegal sports betting market is likely tenfold that number, or more, based on studies from Congress and gaming analysts. 

While we don't know how big a financial impact this could have on Scientific Games, if any, it's incrementally positive for the business in the short term. Now, the company has to prove that the sports betting business will indeed drive revenue, which could take years to become a reality. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Light & Wonder, Inc. Stock Quote
Light & Wonder, Inc.
$42.88 (-2.41%) $-1.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.