Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down the current state of legalized sports betting in the U.S. after MLB partnered with MGM Resorts (MGM - Free Report) . The episode then dives into the world of sportswear and sneakers after another historic apparel firm jumped back into the business of basketball.
The American Gaming Association estimates that more than $150 billion is bet on sports illegally every year in the U.S. This means we could soon see more than the eight states that currently offer legalized sports gambling enter the market.
The likes of FanDuel, which is owned by Paddy Power BetFair , Caesars (CZR - Free Report) , MGM, William Hill , and others have all jumped into the online sports betting industry in New Jersey. Going forward, live in-gaming betting looks poised to drive the sports betting market in our mobile age. This is part of the reason why MLB became the third major North American professional sports league to partner with MGM.
"Our research is really strong on the idea that sports gaming is an important source of fan engagement and we operate in a competitive environment and we have to take advantage of every opportunity to drive engagement by our fans," MLB Commissioner Rob Manfred said in a release.
Going forward, it will be interesting to see if companies like Facebook (FB - Free Report) , Twitter (TWTR - Free Report) , or Google (GOOGL - Free Report) possibly enter the sports betting business because of their massive user bases and infrastructure. Maybe more likely, however, would be an influx of young tech-focused sports betting startups that try to shake up the traditional gaming giants’ current control over the market.
Meanwhile, privately-owned New Balance is ready to jump back into the basketball shoe market after the sportswear firm reportedly signed NBA star Kawhi Leonard last week. The move follows Puma’s splash announcement to get back into the NBA this summer after nearly 20 years away from the sport. New Balance and Puma will try to grab some market share from Nike (NKE - Free Report) , Adidas (ADDYY - Free Report) , and third-place Under Armour (UAA - Free Report) .
With that said, performance shoe sales have slipped, and the current sportswear market seems to favor athleisure firms such as Lululemon (LULU - Free Report) . Yet, these companies might try to capitalize on the current retro trend, which could actually favor Nike and Adidas.
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