U.S. sports betting has grown into a $10 billion industry, according to Goldman Sachs (NYSE:GS). If the investment banking firm’s predictions prove correct, the boom that started when a 2018 Supreme Court decision legalized the industry in America has begun.
Ben Andrews, head of leisure and travel research for Goldman, predicts Americans will legally gamble $45 billion each year on sports once the market “matures,” which he says will be “driven by a combination of new state openings and a higher share of the consumer wallet being spent on sports betting over time.”
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Business has certainly been great for industry leaders such as DraftKings Inc. (NASDAQ:DKNG), which has seen its stock soar about 134% in the past year.
But a rise in sports betting scandals and investigations lately have some wondering whether it’s gone too far.
Perhaps the largest scandal is that of Los Angeles Dodgers star Shohei Ohtani’s interpreter, who is alleged to have stolen money from the baseball player to gamble on sports.
Shortly after, professional basketball got caught up in a sports betting investigation of its own with Toronto Raptors player Jontay Porter, brother of Denver Nuggets star Michael Porter. Jontay Porter has been away from the team for the past week, with renowned ESPN reporter Adrian Wojnarowski reporting it’s because he is “the subject of an NBA investigation into irregularities on prop betting involving him.”
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Prop bets are defined as a side wager on a part of the game that is irrelevant to the outcome, and player prop bets are prop bets on a part of a specific player’s performance, such as how many rebounds they get.
Recently, news of player prop bets potentially getting banned at the collegiate level caused gambling stocks to fall, with DraftKings slumping 7% on the report.
NCAA President Charlie Baker said he’s pushing for states to ban player prop bets because “sports betting issues are on the rise across the country with prop bets continuing to threaten the integrity of competition and leading to student-athletes getting harassed.”
North Carolina college basketball star Armando Bacot recently slammed sports betting as “terrible,” elaborating “I thought I played pretty good last game, but I looked at my DMs [direct messages], and I got over 100 messages from people telling me I sucked and stuff like that because I didn’t get enough rebounds.”
The state of North Carolina legalized online sports betting on March 11, joining 37 other states where it is legal.
While the industry’s growth has exploded, expanded legalization has been slower than expected, raising concerns about player harassment and potentially corrupt game participants — factors investors in sports betting stocks should consider monitoring.
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This article Sports Betting Surge Fuels Gambling Stocks As Scandals Raise Concerns, This Star College Athlete Says, ‘It’s Definitely A Little Out Of Hand’ originally appeared on Benzinga.com
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