Two decades ago, harrahs entertainment pioneered a revolutionary hub-and-spoke loyalty program between its regional casinos and flagship properties in las vegas and atlantic city. harrahs grew powerful enough to swallow caesars entertainment, the company behind the caesars palace casino complex, eventually taking its name.

Caesars latest acquisition of william hill for $4bn anticipates an industry step change rather than building on one. the gambling group from the uk, which liberalised years ago, should keep caesars at the forefront as mobile sports betting and online casinos develop in the us.

A new us gambling industry is emerging. revenues from sports betting and online gambling could reach more than $30bn. that depends on plenty of us states legalising these activities. wall street is comfortable underwriting that hope, even if caesars core brick and mortar business has been battered by lockdowns.

Las vegas in 2019 recorded $12bn alone of gaming revenue. recent statistics from sin city show that tourist traffic is down a quarter so far this year. on march 18, the shares of eldorado resorts, the regional chain swallowing caesars for $17bn, crashed to $7 per share after starting the year around $60.

Eldorado closed the buyout of caesars and assumed its name in july. its shares have rocketed back to $55 on hopes of deal synergies and an online bonanza. caesars is now selling $2bn in stock to help fund the purchase of william hill, an unloved business with valuable expertise.

Still, there is a bigger winner of the digital gaming jackpot: penn national gaming. the once sleepy regional operator inked a partnership with barstool sports to use the media groups brand and customer base to build out its sports betting and internet casino. penn shares in the past six months have gone from $4.50 to more than $70.

Penn has said the cross-play between barstool and penn customers can almost double its operating profit by 2025, even under conservative assumptions. its shares now are trading at 50 times next years net profits. shareholders are gambling big on sports betting and online wagering, expecting ordinary americans to do the same.

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