Truist Securities: Understanding the dynamics of US gambling

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Barry Jonas is the Managing Director of Truist Securities. He talks to SBC Americas about the ever-changing dynamics of the US gambling space.

Truist Securities is the investment banking arm of Truist Financial Corporation. Truists was formed in 2019 with the merger of SunTrust and BB&T.

In 2003, he was recruited out of business school to work for MGM Resorts in Las Vegas. He moved to International Game Technology in 2004 and worked on M&A transactions for Wagerworks in 2005. In 2010, after a stint in finance for IGT’s China division, in 2010 he moved on to Wall Street to head the gaming equity research platform at SunTrust Robinson Humphrey.

Vertical integration is a key strategy for the larger players in sports betting. B2B technology providers are limited to smaller to medium size operators or unique services like data feeds and in-play wagering. Having diverse, sizable and sophisticated game content can be a real differentiator for B 2B players.

For B2C, there needs to be more consolidation to reach profitability margins. B 2B players could see more M&A to drive scale. Combination of online focused players with land based gaming suppliers could make sense in an increasingly ‘omni-channel’ world.

The US gambling market is in a growth mode with little focus on near-term profitability. The market will settle on a few winners with the bulk of market share followed by second tier players fighting for scraps. Regulators' oversight of gaming is a risk worth watching. iGaming is not a right. States' tax revenues are less meaningful than many would think. iGambling is still a privilege, not an right, and it's important to be responsible.