JPMorgan Forecasts US Micro-Betting Boom

Posted on: March 18, 2021, 10:07h. 

Last updated on: March 18, 2021, 01:13h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

A team of JPMorgan analysts led by Daniel Politzer say micro-betting is shaping up to be the next big thing in sports betting.

Micro bets are derivatives of in-game counterparts. With an in-game or live wager, a bettor places a traditional wager — money line, over/under or spread — with odds adjusted for the fact that the game already started. Conversely, a micro wager is a bet on a specific in-game event, say whether or not a field goal attempt in a football game will be successful, or whether the next pitch in a baseball tilt will be a ball or strike.

While live wagering is popular in Europe, the pace of many popular domestic sports is conducive to micro-betting. Live wagering accounts for 75 percent of all sports bets in the UK.

Given the accommodating cadence of US sports with numerous play stoppages in football, baseball, and basketball, versus the continually running clock in soccer, the in-game/micro-betting opportunity could be substantial,” said Politzer in a note to clients.

The analyst sees various forms of live betting driving upside to his forecast of a US sports wagering market valued at $9.25 billion by 2025. That’s a reserved estimate relative to other projections. For example, DraftKings (NASDAQ:DKNG) recently said domestic online sports betting could eventually be worth $22 billion, assuming 100 percent legalization.

Micro-Betting Big Implications

Live wagering is already catching an eye within the industry. For example, Australia’s PointsBet (OTC:PBTHF), which also operates in the US, said earlier this week it’s paying $43 million to acquire Banach Technology in a move aimed at bolstering its in-game footprint.

While the JPMorgan analysts don’t go into detail regarding specific stocks poised to benefit from the proliferation of micro-betting, it’s reasonable to surmise the list features the usual suspects with an already sizable share of the US online sports betting market. Those names include DraftKings, Flutter Entertainment’s (OTC:PDYPY) FanDuel business, and Penn National Gaming’s (NASDAQ:PENN) Barstool Sportsbook, among others.

DraftKings CEO Jason Robbins has spoken publicly about the opportunity-rich field of live wagering and some operators are already teasing the micro concept. For example, FanDuel partnered with Simplebet on a free-to-play game during the 2020 NFL season where users attempted to predict the outcomes of teams’ drives. Simplebet is a business-to-business product-development company.

Future fuboTV Predictions

Should the micro-wagering market blossom on par with the bull thesis laid out by JPMorgan, there are other possible winners.

Notably, fuboTV (NYSE:FUBO) could eventually become a force in the in-game, event-driven market. In fact, some of the company’s biggest investors say that’s part of the thesis that underpins this stock.

With a regional sports networks (RSNs) deal with Sinclair Broadcast Group and extensive sports wagering operational experience of its own, Bally’s Corp. (NYSE:BALY) is another company that could benefit as micro-betting takes off.