Licensed Books Win Back the Flow
jrap@jon
−1.4%
since Oct 3
The idea
I believe courts and state regulators push prediction markets like Kalshi out of sports betting in many states by 2027, fully by 2029, sending that betting volume back to licensed sportsbooks. This isn't fully priced into names trading under that regulatory cloud, so I own pure online sportsbooks as the core and licensed casino operators with sportsbooks as steadier ballast, while deliberately avoiding data-feed companies since a sportsbook-only world shrinks their customer base.
What it owns
- Licensed casino operators that run sportsbooks alongside their gaming floors have steadier underlying businesses and still win if betting stays within the state-regulated system. · Caesars EntertainmentIt pairs a licensed sportsbook with a major casino business, so it benefits if betting stays state-regulated while maintaining earnings from gaming floors regardless of the outcome., MGM Resorts InternationalIt co-owns BetMGM and operates licensed casinos, providing steadier exposure to state-regulated wagering that persists even if the prediction market competition remains., Penn EntertainmentIt owns regional casinos plus an online betting arm, providing steadier exposure to the licensed-wagering system if state regulators maintain control over sports betting., Boyd GamingIt operates regional casinos and holds a stake in the licensed betting economy, benefiting if wagering stays within the state-regulated framework., Churchill DownsIt was built entirely on state-sanctioned wagering and its competitive moat strengthens if courts affirm that sports betting belongs within the licensed system., Bally'sIt is a casino operator with a sportsbook turnaround that becomes more valuable if the flow returns to licensed books, requiring both the court outcome and its own operational recovery.47%
- The companies whose entire business is licensed sports betting gain the most if prediction markets retreat from sports and wagering money flows back to state-regulated books. · DraftKingsIt is the largest US-only licensed sportsbook and would capture wagering outflows if prediction markets lose ground in sports, a shift not fully reflected in its current valuation., Flutter EntertainmentIt owns FanDuel, half of the US online betting duopoly, and captures the same benefit if state-regulated books reclaim market share from prediction markets., Rush Street InteractiveIt is a smaller state-licensed online book whose smaller base means a larger percentage gain if wagering money returns from prediction markets to licensed operators., Super GroupIt operates Betway, a licensed online book that gains if the betting market stays within the state-regulated model rather than shifting to prediction markets.41%
- Cash12%