In the three years since the U.S. Supreme Court legalized sports betting in the U.S., the opportunity is already starting to pay off big for investors.
In March alone, some $4 billion was bet on sporting events with U.S. sportsbooks, and New Jersey is poised to become the first state to accept $1 billion in wagers in a single month. Online betting itself could become a $22 billion market in the next few years, and Goldman Sachs analysts forecast that U.S. sports betting overall will be a $40 billion market by 2033.
It is an opportunity that will generate a lot of winners, but the two sports stocks below look particularly poised to take advantage of that bull run.
Right now, fuboTV (FUBO 1.07%) is the premier sports livestreaming platform that just blasted a moonshot of a quarter. The earnings report was full of superlatives: Revenue doubled, advertising sales tripled, subscription revenue rocketed 131% higher, the number of subscribers more than doubled to over 590,000, and the amount of sporting events they streamed totaled 228 million hours, up 113% from last year.
fuboTV has a lot of irons in the fire that should pay off handsomely for it. The streamer just announced its Qatar World Cup qualifying match programming for the South American Football Confederation that will allow it to tap into an especially large audience for the 70 different matches that will be aired.
The sports livestreaming platform also ought to benefit from the disconnect cable TV is experiencing from its customers. CEO David Gandler recently said most of fuboTV's new subscribers come from cord-cutters, many of whom are looking for a more narrowly focused, personalized viewing experience.
Arguably the biggest growth potential fuboTV has is with sports betting, which it is only just getting ready to dip its toes into. Having acquired Balto Sports for just that purpose, fuboTV is planning on introducing its own sportsbook later this year.
fuboTV is also not without risk. It is going up against giants like ESPN in sports programming, and against DraftKings and Flutter Entertainment's FanDuel in sports betting. The stock is heavily shorted with more than 20% of its float sold short, meaning a lot of people are expecting it to go lower before it ever begins to go higher.
But sitting at the confluence of important leisure and entertainment trends gives investors in fuboTV a front row seat to the action.
2. Genius Sports
Genius Sports (GENI 0.81%) is new to the public markets, having merged with special purpose acquisition company dMY Technology Group in April, but it possesses unique qualities that investors ought to note.
First, it is a sports data management and "integrity services" provider for sports leagues, sportsbooks, and media companies. It signed a four-year deal with the National Football League in April to be the official data provider for NFL games, but which also allows it to leverage the position to "represent the NFL's legalized sports betting advertising inventory" across all of its properties, including digital platforms.
Before that, it signed a deal with Major League Baseball to join the roster of feeds offering the league's data to sportsbooks. Genius also has agreements with NASCAR, the PGA Tour, and the National Collegiate Athletic Association, as well as with a number of sportsbooks including Fanduel, Caesars Entertainment's William Hill, and MGM Resorts BetMGM.
The sports data provider also hit a home run on earnings this past quarter, with CEO Mark Locke telling investors: "Our strategy of powering the global sports data ecosystem has supported our growth in the quarter, and we're confident in our ability to continuously improve our end-to-end solution and deliver on our increased guidance for the year."
As a global sports data company, Genius Sports is able to take advantage of the worldwide opportunity sports betting provides, which in many ways is larger than just the U.S. market that's only just getting started and provides investors with a world of opportunity to profit.