| |  | TOGETHER WITH |  | | Happy Sunday. Before we start our deep dive, let’s talk about, well, talking. Most of us chit-chat all day – with our friends, our dogs, even those funny little digital assistants on our phones. So imagine how unnerved we were to find out that Siri and Alexa only understand about 75% of what we tell them? Yikes. The good news is, the days of miscommunication will soon be over thanks to SapientX. Their alternative AI product lets you talk to your technology the way you always wished you could: Simply, comprehensively, and flawlessly. SapientX's voice enabling AI works for everything from automobiles to appliances to vending machines and beyond – in other words, there’s no shortage of market share to grab out there. Hear that? That’s opportunity knocking. Invest in SapientX’s StartEngine campaign right here. | |  | The Burgeoning World of Legalized Gambling, Explained Tomorrow night is set to be — by far — the biggest night of 36 young athletes’ lives. The men's basketball teams from the University of Kansas and the University of North Carolina will square off in the NCAA national championship game, the culmination of this year’s March Madness tournament. Some players will go on to the NBA, earning millions. Others will land in prestigious international leagues like Spain's Liga ACB, Greece's A1, or the Turkish Basketball Super League. Some will finish college and move on to white-collar jobs. Either way, they’ll have a chance to create a lasting legacy in the short time from tip-off to the final buzzer. But they’ll also have something relatively new riding on their shoulders. This year, a stunning 45 million Americans were expected to wager $3.1 billion on the March Madness tournament, according to projections by the American Gaming Association. And while everyone loves a $10 office pool, 76% of this year’s wagers will be placed on individual games and outcomes, outside of traditional brackets, up from 55% last year. The simple reason: sports betting is now legal in more than two dozen states across the US. Today, we’ll examine how we got here, unpack the current state of gambling operations in the US, and opine on whether there’s a profitable future for the startups and industry titans looking to make it rain in this budding space. A Cheater and the State of New Jersey Got Us Where We Are Today The story of modern gambling laws begins with two famous athletes. First is Pete Rose, one of the greatest and most controversial baseball players in history. A Major League Baseball superstar from 1963 to 1986, he remains the most prolific hitter ever in the sport, with a record 4,256 hits to his name. He was also, as you probably know, a gambler. And a deeply unethical one at that. Rose bet on his own teams, leading the MLB to ban him for life and bar him from the Hall of Fame. The scandal, which broke in 1989 and dominated headlines, set the stage for a crackdown on sports gambling by highlighting the notion that mixing sports and betting can lead to corruption. Another athlete, as it happens, led the crackdown. That was Bill Bradley, a former New York Knicks player who used his influence after retiring from the NBA in 1977 to win a United States Senate seat in New Jersey. Bradley would go on to become the driving force behind the Professional and Amateur Sports Protection Act of 1992 (PASPA), which banned sports gambling in the US. With the backing of major pro sports leagues and the NCAA — and Bradley publicly charging games could be tainted by shady money and Tony Soprano types — PASPA received overwhelming support, passing the Senate in an 88-5 vote. "It was very non-controversial," then-US Rep. Tom McMillen, another former NBA player, told ESPN. "It was right in the Pete Rose aftermath." Because of PASPA, legal sports betting in the US was confined to only a handful of places that were exempt from the law: sports lotteries in Oregon, Delaware, Montana and licensed sportsbooks in Nevada. Until 2018, that is. Ironically, it was the state that Bradley once represented, New Jersey, that challenged PASPA in court. State officials pressed for the right to legalize sports betting at casinos and racetracks and the case ultimately made its way to the US Supreme Court, which struck down PASPA in a May 2018 ruling. That paved the way for individual US states to legalize and regulate sports gambling. |  | Big Money but No Big Profits (Yet) Coming out of the pandemic, gamblers have embraced a risk-on mindset. American casinos and gaming mobile apps generated a record $53 billion in revenue last year, representing a 21% jump from pre-pandemic 2019. “Our incredible rate of recovery sets us apart from others in the hospitality sector and the broader economy,” Bill Miller, the CEO of the AGA, said at a press conference in January. Importantly, the lion’s share of revenue still stems from traditional casinos and classic games like slots and Blackjack. While sports betting is growing at a faster pace than other gambling segments — total wagers grew a massive 165% in 2021 — it remains a small piece of the pie, amounting to $4.3 billion in revenue last year (still a record). Sports Betting Handle (Total Wagers), By State |  | Even more important — and concerning for investors — is just how much capital is being torched in the search for users and scale: - DraftKings, among the most high-profile sportsbook operators in America, reported a $1.5 billion loss in 2021 after losing $1.2 billion in 2020.
- UK’s Flutter Entertainment, the owner of FanDuel, reported a $323 million EBITDA loss in 2021 for its US division.
- Caesars Digital reported a net loss of $580 million in 2021, and BetMGM said it lost $211 million.
The Bull Case: While the profit and loss statements look ugly today, optimists expect a bright future as the market moves towards maturity: Moving On Platform: ESPN estimates that under-the-table bets on the NFL and college football alone top $95 billion every year. Bets on this type of illegal gambling — typically made in gray areas like foreign betting books — are expected to gravitate home to America over time. More States Coming: It’s a truism that as more states introduce legalized sports betting frameworks, more revenue will materialize. Importantly, legalization is happening faster than initially thought. A 2017 report by Eilers & Krejcik Gaming estimated that 32 states would legalize gambling within five years of a US Supreme Court decision striking down PASPA. Less than four years after the court kiboshed the law, 30 states and the District of Columbia have fully legalized gambling. Three more, including the huge markets of Florida and Ohio, have passed laws to legalize gambling but haven’t fully implemented them yet. Help From Above: Sports leagues, which once supported PASPA, are also increasingly on board to help normalize sports betting. The NFL has struck partnerships with FOX Bet, BetMGM, PointsBet, WynnBET, Caesars Entertainment, DraftKings, and FanDuel. The MLB has signed deals with at least seven sports betting firms, the NBA’s official partners are DraftKings and FanDuel, and the NHL has inked deals with multiple operators. |  | Good for State Coffers, Bad for Operators Marketing Budgets With so much money changing hands, the one clear winner from legalized gambling is state tax coffers: - New York State, which saw more than $2 billion in wagers in the first two months after it legalized sports betting in January, made nearly $78 million in tax revenue off that initial haul.
- That was significantly more than the $49 million the state’s budget office estimated would come in during the first three months of legalization, most of which will go toward funding education. The three-month estimate has been revised to $110 million, on top of $200 million in licensing fees collected from betting operators.
“I don’t think we’re overly surprised by the numbers coming out,” Colin Mansfield, a gaming analyst at Fitch, told The New York Times. “People like to gamble on sports.” Over two million unique user accounts in New York made more than 245 million sports betting transactions, according to GeoComply, in the first two months of legalization. The sheer volume of new customers has led sports betting operators to do crazy things to try and woo them. For example, Caesars Sportsbook offered to match user deposits up to $3,000 and a $300 sign-up reward. “It’s great for New York, it’s pretty damn good for the bettors, it’s an absolute disaster for the operators,” Alan Woinski, a gambling industry consultant, told the NYT. “It’s war. They’re killing each other.” Companies to Watch Against the backdrop of rising interest rates and no surefire sign of profitability, sports betting stocks have been sliding for months: Shares of DraftKings fell 16% in March and Penn National Gaming shares followed suit with their own 17% drop. FanDuel owner Flutter, which trades on the London Stock Exchange, is down 24% this year. Caesars Entertainment is down 11% in the last month. But the boost from the March Madness tournament, culminating with tomorrow night’s game, and a future where more and more states open up sports gambling activity, has at least one CEO ready to prove doubters wrong: “If you sold #DKNG today, just be aware that my team and I are on a mission to make you regret that decision more than any other decision you’ve ever made in your life,” DraftKings CEO Jason Robins tweeted on March 9. ****** A message from our sponsor: So Long, Siri: How SapientX Is Changing Voice Tech “Hey Siri, show me what a good investment looks like.” Ask your phone that today, and you might get pointed towards Tesla or Apple. But before you know it, that recommendation could very well be SapientX, thanks to their game-changing, AI-powered voice assistants. What sets SapientX voice assistants apart? - They can speak 40 languages and dialects to reach 5.5 billion people
- Their (up to) 99% conversational accuracy blows Siri and Alexa’s 72-75% accuracy out of the water
- They can work both online and offline, while still protecting user privacy
With custom voice assistants already created for global brands like Mitsubishi, Yamaha, and NEC, it’s not hard to see why people are excited about SapientX. Pair that with the fact that the Voice AI market is expected to hit $31B by 2025, and you’ve got one seriously promising investment opportunity. Join over 3,000 investors with SapientX’s campaign right here. | | | | | | Written by Sean Craig. | Disclaimer | | | | The preceding post was written and/or published as a collaboration between The Daily Upside’s in-house sponsored content team. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. The Daily Upside may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer’s securities. This content is for informational purposes only and is not intended to be investing advice. This is a paid ad. Please see 17b disclosure linked in the campaign page for more information. | | | | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
