Investment firm Morgan Stanley has once again lowered its revenue expectations for US online gambling.

On Tuesday, the formerly bullish bankers projected regulated states’ online gambling revenue will go no higher than $2.7b by 2020, barely half their most recent $5b estimate (and just one-third of previous estimates). The 2017 estimate has been lowered from $1.3b to just $410m. Morgan Stanley believes 15 states will be offering regulated online gambling by 2020 but none are expected to join New Jersey, Nevada and Delaware in 2015.

As for the Restoration of America’s Wire Act (RAWA), the federal bill that would ban most forms of online gambling except horseracing and fantasy sports, Morgan Stanley believes passage is “unlikely given legislators’ split views.” While RAWA’s recent House subcommittee hearing “suggests [RAWA] could be gaining momentum,” Morgan Stanley believes the bill “faces long odds of passing, especially without carve-outs for online lotteries and existing online gambling states.”

RAWA LOTTERY CARVEOUT COMING?