UK bookies to take a gamble on US betting markets
The decision to overturn a 25-year long federal ban on sports betting in the US by the Supreme Court has opened up massive opportunities for British bookies, with some estimates suggesting that the market could reach $19bn in revenues by 2023.
The evidence is there of a potentially huge market according to the American Gaming Association, who revealed that up to $150bn a year was being wagered illegally on sports in the US prior to the ban being lifted. New Jersey and Delaware were the first states to legalise sports betting in June 2018, but they have since been followed by Mississippi, West Virginia, New Mexico, Pennsylvania and Rhode Island.
Partnerships have already been struck
As a result, many of the UK’s biggest bookmakers have struck up partnerships with US groups or they have launched other routes into the market which they hope will help counter the challenges they are facing in the UK.
PaddyPower Betfair announced the first major partnership with a US company by taking a 60% stake in fantasy sports site, FanDuel, whilst GVC, the owner of Ladbrokes Coral, has signed a $200m deal with MGM casinos to create Roar Digital to provide sportsbooks in all MGM casinos.
William Hill, who already had a presence in Nevada, have since agreed a $50m equity deal with casino operator Eldorado, and Gaming operator 888, launched in New Jersey with a focus on the online market, which is currently only legal in only two other states, West Virginia and Pennsylvania, as other states have legalised retail first.
UK bookmaker investment comes with risks
Yaniv Sherman, head of commercial development at 888 compared the opportunities now open to UK bookmakers to being like a new American gold rush. Yet there are some obvious risks as it is uncertain how soon other states will open up betting markets, and GVC chief executive, Kenny Alexander, said he expected the company to lose £4m-£5m on its US business in 2019.
However, if the opportunity is as big as the UK gambling industry thinks it is, they should be investing and making losses to achieve the gains in later years.