May 4, 2023 3 min read


Morgan Stanley: Top Five Sportsbook Operators to Grow via Acquisitions

Morgan Stanley analysts have speculated over the upcoming growth of the largest five sportsbook operators with the help of acquisitions

After expressing their belief that gambling in Macau is on the right track for recovery thanks to optimistic 2023 estimates, gambling experts at Morgan Stanley have made fresh speculation on the rising number of sportsbook-related deals that will be sealed in 2023 and beyond. 

In a note issued to their clients, the analysts working for the New York-based global leader in financial services discussed the fast-paced acquisitions and mergers that took place in the sports betting industry in the past years. 

While putting special emphasis on operators’ results, the experts also expressed their belief that such deals could record even more progress after looking at the numbers for 2023.

The Top Five Operators Quadrupled Revenue in Seven Years 

Using the same note, Morgan Stanley representatives spoke about the impressive rise in revenue recorded by the most successful five sportsbook operators on the planet.

According to official data, their revenue went up more than four times. The results were largely based on the impressive number of acquisitions that took place between the operators and a select roster of chosen companies. 

Now, Flutter Entertainment is expected to record more revenue growth in 2023 compared to the revenue totaled by all five sportsbook operators in 2015. Earlier in the week, the company posted strong Q1 results with a revenue rise of 54%. 

This comes after FanDuel’s parent company announced over a dozen acquisitions in the past 10 years, turning into one of the most acquisitive companies in the industry.

The changes recorded by the top five operators, analysts believe, have been all triggered by market development along with mergers and acquisitions chosen by operators as means of diversifying revenue and reaching more benefits. These benefits are expected to help tackle the ongoing rise in taxes and opposing regulatory changes. 

Mergers and acquisitions are also projected to broaden even more in the context of more “diversification, scale, technological capability, cash flow generation, and balance sheet capacity” being recorded when compared to smaller competitors. 

US, the Future Sports Betting Hub of the Industry?

With PointsBet confirming it is on the verge of selling its US operations and its Australia branch probably soon following suit and Rush Street Interactive into the spotlight for a similar takeover, Morgan Stanley experts believe it is safe to assume that the US could turn into a hub where the industry could consolidate its activity. 

At the moment, BetMGM, DraftKings, and FanDuel control over 75% of the online sports betting market in the US, thus forcing smaller competitors to consider merging with one another in an attempt to gather enough market share to count. 

The big loser in the consolidation game involving mergers and acquisitions could be data providers including Sportradar and Genius Sports which, according to Morgan Stanley experts, would lose leverage when negotiating with the smaller number of remaining operators. 

After finishing her master's in publishing and writing, Melanie began her career as an online editor for a large gaming blog and has now transitioned over towards the iGaming industry. She helps to ensure that our news pieces are written to the highest standard possible under the guidance of senior management.

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