The global rise in sports betting is impossible to ignore if you like to back a fast-expanding sector with untapped potential. The race is on to grab a bigger slice of the spending power of younger consumers who like to watch sports, while also placing a bet – or multiple bets.

In the US, the main contestants in this battle are Draft Kings and Fan Duel, owned by Flutter Entertainment, the Dublin-based owner of Betfair and Paddy Power.

Flutter is number one in the league, thanks in part to its special competency in what is known as the ‘parlay’, where several bets are combined into one wager.

Flutter and Draft Kings may be the dominant names, but other listed US players include Caesars Entertainment, PENN Entertainment and Bet MGM, a joint venture between MGM Resorts and Entain, which owns Coral and Ladbrokes.

Yet seemingly, such are the opportunities that even Walt Disney has overcome its previous staunchly-held moral objections to gambling in any form to make its debut in this controversial field with its ESPN Bet app.

The UK’s sports betting market is worth £3.5bn and is expanding at the rate of 4.5 per cent a year, but the US is the prime focus. Because as Brandt Montour, analyst at Barclays, observes, sports betting appears to have ‘staying power’ in the life of American sports viewers.

Indeed, some observers even regard sports betting as one of America’s top growth industries.

This assessment, which will excite some investors and dismay others, is based on eye-popping data.

In America, about a half those watching a baseball or American football game can already use an app to bet on the outcome or almost any other aspect of the action, such as the margin of victory.

But this is forecast to rise to about four-fifths of spectators, driving a 60 per cent jump in revenues from this form of gambling in the US to $18billion by 2027.

By 2030, or so Flutter predicts, the sports betting and online casino could be worth $63billion, which is 50 per cent more than the 2022 estimate. This ascent will be fuelled by sports betting, including betting on ‘fantasy’ sports, where players devise imaginary teams.

As much as $1.3bn was splashed out on this year’s Super Bowl, the climax of the American football season. This was 20 per cent up over a year. About 1.8m fans downloaded sports bet apps in the weeks before the event.

America’s status as the top sports-betting nation was highlighted by Flutter’s decision in January this year to move its primary stock market listing from London to New York, although it retains a secondary listing here.

Subsequently, shares in Flutter – which was formed from the merger of Betfair, Paddy Power and The Stars Group – have soared by 33 per cent to $236 spurred by optimism over the outlook. The shares are now 147 per cent higher than five years ago.

Draft Kings shares also benefited from its rival’s shift, rising by 11 per cent since January.

Flutter forecast last month that its profits would leap to $5billion (£3.7billion) by 2027. Analysts expect $2.51billion for 2024. The 2027 figure could feasibly be larger if more Americans are able to embrace sports betting.

This was legalised in that country in 2018 – the year Flutter acquired Fan Duel – although individual states can still outlaw the practice.

California and Texas are holding out, but other states have been won over – principally by the chance to collect taxes, but also by the desire to clamp down on criminality. Wealth manager Oppenheimer and other analysts, who follow Flutter and Draft Kings, point out that before the arrival of licensed operators, many billions were being wagered through illegal gambling rings, often based offshore.

Oppenheimer estimates that as much as $150billion a year is staked via this black market route, rife with corruption and violence. This is a point to remember for investors who may find gambling companies distasteful, although it is legitimate to wonder why the US does not have an overall regulator, akin to the UK’s Gaming Commission.

To date, the size of the illegal gambling market and the tax haul have not been sufficient reason for California – the most populous state with close to 40m inhabitants – to change its mind on the sports betting.

But Amy Howe, chief executive of Fan Duel, said last month that she was ‘optimistic that at some point it will happen’. Texas may prove more obdurate, despite the efforts of Texan billionaire TV personality and businessman Mark Cuban who last year sold a majority stake in his Dallas Mavericks basketball team to the Adelson casino dynasty.

Florida may have legalised sports betting but with restrictions. Flutter is not permitted to operate there. However, Flutter boss Peter Jackson is looking beyond the US to countries where sports betting is developing fast. Last month it bought the Brazilian NSX Group whose major brand is BetNacional. Brazilians mostly bet on football but are turning to other sports.

Football is also the Italians sport of choice to bet on, which is why Flutter last month paid £1.9bn for Snaitech, Playtech’s Italian subsidiary. Jackson described the deal as ‘compelling strategically and financially’.

Snaitech, usually called Snai, holds second place in Italy’s sports betting field and has 2,000 retail outlets where the Italians like to place their bets.

Online gaming is less popular. Only 21 per cent of Italians choose this option. But one suspects that Flutter will seek to change this.

Last month – a busy period for Flutter – Jackson pledged that the company would carry out $5billion worth of share buybacks over the next three to four years. These programmes, which may begin next month, should provide a long-term boost to the shares.

Montour predicts that the shares will climb to $275. Oppenheimer is even more enthusiastic, setting a target price of $300. The highest target price is $355, with ten of the 18 analyst teams that follow Flutter rating the shares a ‘buy’, although they are trading at a very expensive 40 times earnings.

Draft Kings is also rated a buy, although analysts are less confident about share price increases.

The average target price is $49, against the current $37, although one analyst expects a leap to $89.

Entain is regarded as another buy. The average target price is 935p, against the current 770p, following recent results showing ‘an acceleration in momentum’ at the company.

Although this all may sound enticing, there is considerable risk involved for anyone contemplating a flutter on Flutter or any other company in the sports betting line. In the US, there is mounting concern about the ‘gamblification’ of sports and the lack of a regulator who would insist on more checks on customers’ circumstances, including affordability monitoring.

All gambling is addictive but it is argued that sports betting may be especially so, since it may combine wagering with undying loyalty to a favourite team, which persists through thick and thin.

These issues will firm the resolve of anyone who, on ethical grounds, avoid shares in gaming or tobacco businesses. But they should give pause for thought to everyone else, if only because states may try to raise more taxes from this industry. Illinois has already imposed a levy on operators.

But if you minded taking a bet on this growth industry, Flutter represents may be worth the risk.

If you are already an investor, stay on board for the thrills.

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