Published: May 19, 2022

Morgan Stanley Predicts The State of Sports Betting and Online Casinos in 2025

Morgan Stanley predicts the U.S. sports betting industry growing to $12.8 billion by 2025. Pennsylvania would account for $701 million in yearly gross gaming revenue with New York leading all states with $1.7 billion in revenue in 2025. It would represent a massive increase from $400 million in 2018 driven by widespread legalization. In 2021, sports betting revenue was $4.3 billion.

FanDuel (30%) and DraftKings (23%) are expected to be market share leaders in 2025.

In the “US Sports Betting and Online Gambling Primer 3.0” released in May, Morgan Stanley analysts took a deeper look at the sports betting and iGaming industries and forecasted the future.

iGaming in 2025

Today, iGaming is legal and live in seven states including Pennsylvania and New Jersey. Analysts at Morgan Stanley only believe four more states will join due to “less public and industry support and louder industry opponents.”

Analysts expect the U.S. iGaming market to grow to $7.8 billion in 2025.

Top 4 states in 2025 for iGaming revenue 

  • Michigan: $1.495 billion
  • New Jersey: $1.490 billion
  • Pennsylvania: $1.460 billion
  • Illinois: $1.336 billion

New York was not included in the report. During the iGaming Next conference last week, State Sen. Joseph Addabbo said:

“iGaming is the next step for New York. It’s not a question of if, but when. Neighboring states are doing it very well.”

What states will lead for sports betting revenue in 2025?

Prior to U.S. Supreme Court’s repeal of the Professional and Amateur Sports Protection Act (PASPA), which banned sports betting outside of Nevada, the American Gaming Association (AGA) estimated that $150 billion per year was bet illegally on sports. The trade group for US casinos suggested it could be a $7.5 to $15 billion per year revenue market at a 5-10% gross win margin.

May 14 marked four years since the repeal of PASPA. Currently, there are 30 states, including Washington D.C., where sports betting is legal. Five more have legalized but are not yet up and running.

Morgan Stanley analysts expect that by 2025, there will be 42 states with legalized sports betting.

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