On Friday, September 21, 2017, a major piece of news was published on the official website of President Trump. On that day, it was reported that the 45th President of the United States had signed a bill into law that would legalize professional sports betting in the United States.
The story, which was prominently featured on the front page of the administration’s website, made national headlines and kicked off a fierce debate about whether or not the U.S. should legalize sports wagering. The president’s decision, which was largely expected, has significant ramifications for investors who are looking to get involved in the growing field of esports betting, a lucrative business that is set to explode.
What Is Esports?
If you’re unfamiliar, esports refers to electronic sports, which can range from video games to online tournaments where participants show off their skill on big screens for crowds of fans and bettors.
The global market for esports is valued at around US$14 billion, and it is growing at a rate of around 30% year-over-year.
There are many reasons why esports are booming. First, the world is a huge market that is interested in games. Google searches for “esports” hit an all-time high in September of this year.
Additionally, the games themselves are becoming more popular, with some estimating that the total market value of the industry will reach US$14.9 billion by next year. Finally, as the world becomes more digital, livestreaming games has made it much easier for people to follow sporting events, whether they’re happening in real life or on the virtual landscape.
Many factors can contribute to an investment’s ROI (return on investment). To determine how much each factor will impact your investment’s ROI, simply multiply the relevant % change by the current price. For example, if you’re looking into buying 100 shares in Company A, and you foresee an increase of 10% in the stock’s price, then the return on your investment will be 19.9% (100 x 1.10).
Here To Stay
It is a well-known fact that Trump is a big fan of professional sports, particularly football. As a result, investors may be interested in taking a look at the implications of this decision on several professional sports teams whose stocks could benefit.
The Atlanta Braves
One of the first companies that come to mind when one thinks about the implications of this decision is the Atlanta Braves, one of the Major League Baseball (MLB) teams whose stock jumped up 4% on the news.
The Braves are one of the most popular teams in the U.S., playing their games at the highest level of competition, the most popular of which are broadcast on television. The team has been to the playoffs four times in the last five years and won the National League East division in 2016. The only other MLB team that comes close is the Chicago Cubs, whose fans could also become the new fans of the Braves.
Many investors may see the Atlanta Braves as an obvious choice because of their bright orange uniforms, easy-to-spot logos, and passionate fan base. The organization has also been a bit cheaper than most other professional sports teams, with stock prices recently hovering around the lowest among the major sports leagues. It’s also worthwhile to point out that the Atlanta Braves sold out every game this season, which the team’s owner and Chairman Terry McGuirk attributes mainly to the strength of their young and vibrant fan base. In short, there is a lot to like about Atlanta’s MLB franchise.
The Pittsburgh Steelers
One more NFL team whose share price rose on the news was the Pittsburgh Steelers. The Steelers are one of the most popular teams in the world, known for their vibrant red and black colors, exciting plays, and unforgettable games. The team has also been one of the most active in the NFL in terms of digital media, with Twitter users tweeting about the team more than any other team, including the Los Angeles Rams and Tennessee Titans. The team’s owner, Art Rooney, has referred to their passionate fan base as “diehard backers” who follow the team “like a religion.” The organization is also committed to supporting local communities, with the team donating more than US$11 million in 2016 alone.
Art Rooney’s son, Dan, serves as the team’s president. Under Dan’s leadership, the Steelers have seen increased investment from private equity firms, with the team scoring a significant stake in two esports teams in 2016 alone. The team’s digital media efforts alone are worth more than the total investment of the two esports teams combined. All in all, the Pittsburgh Steelers are a clear choice for investors looking to enter the sports betting industry.
Los Angeles Rams
Another company that skyrocketed up on the day that Trump announced his decision to legalize sports betting is the Los Angeles Rams. The Rams are one of the most popular teams in the NFL, known for their bright orange uniforms, flashy gold accessories, and intimidating helmet logo. Their success can be attributed mainly to the strength of their fans, who regularly make headlines for their passionate support of the team. The Los Angeles Rams are one of the most followed teams on Instagram with over 20.8 million followers, while their Snapchat story has over 24.2 million views as of September of this year.
The team’s owner, Stan Kroenke, has been a pioneer in the sports betting industry, launching online sports wagering operations in Nevada and Arizona in 2014. Many other prominent teams’ owners have also invested in esports teams and digital media, with the New England Patriots’, Philadelphia Eagles’, and Dallas Cowboys’ all ranking among the top five most followed sports teams on Instagram. If you’re an NFL fan, you may want to take a look at the Los Angeles Rams as a potential investment.
Tennessee Titans
The Tennessee Titans are the only other major league sports team that could potentially see an increase in value thanks to Trump’s decision. The team is owned by the State of Tennessee and plays its games in Nashville, Tennessee. The Titans are most well known for their orange and yellow color scheme, which was inspired by the University of Tennessee’s Vols mascot. The franchise also adopted the “Lion King” theme, wearing costumes based on characters from the popular “The Lion King” movie.
The lion king is a character developed by Disney. In the cartoon, the character roars, and the sound is often used as a signature for the franchise. Interestingly, the lion king was not always a symbol of strength and power. The animated film’s director, Rafał Żółkrzynoski, had to fight for the right to use the “Lion King” theme song. After winning the fight, he noted: “The battle was tough, but it was also fun. I can’t wait to hear the song on the big screen.” The song became the franchise’s anthem in 2014 and has not been heard quite the same since. If you’re an esports or movie fan, you may want to take a look at the Tennessee Titans as well.
With all of these options appealing to investors, it’s important to keep in mind the various risks associated with each pick. While there are no guarantees when it comes to investing, the chance to make some money is certainly there. Keep in mind that there are also some legal and regulatory obstacles that need to be overcome before any of these options become fully accessible.
Regulatory And Legal Obstacles
One of the significant challenges that face the sports betting industry is regulatory and legal barriers. Until recently, sports betting was basically illegal in most parts of the U.S., with the exception of Nevada and a few other states where online sports wagering was pioneered. Even in Nevada, sports betting is heavily restricted, with most casinos only able to offer games like Blackjack and Slot Machines, with a few exceptions including the Wynn and some of the smaller properties. As a result, most industry insiders have predicted for years that legalizing sports betting is a matter of time. Trump’s decision won’t change how the games are played, but it will allow for easier wagering and access for American citizens.
If you live in a state where sports betting is illegal, then it is still a major challenge to get involved in the business. In almost all cases, one would have to relocate to a state where it is legal to start a business. The only way to find out if this is a good investment opportunity is by getting started and building an audience. A reliable place to start may be the esports industry, where professional sports teams are looking to get involved. In fact, many established franchises already have teams within esports, and new franchises are looking to get involved due to the industry’s exploding popularity.