British bookmakers bolster U.S. operations as UK cracks down

The U.S. Supreme court in May paved the way to legalize sports betting by overturning a 1992 federal law that had effectively prohibited sports gambling except in Nevada and, to a limited extent, Delaware, Montana and Oregon.

The verdict is likely to fuel cross-Atlantic growth plans of London-listed gambling companies as they increasingly look to expanding in regulated markets where the risk of an unexpected crackdown is low.

Some of the London-listed gambling companies such as William Hill (WMH.L), Paddy Power Betfair (PPB.I) and Sportech (ROD.L) have already responded to the verdict by bolstering their U.S. operations.

The option to expand into the U.S comes against the backdrop of gambling companies facing higher taxation and stricter regulation in their UK home market.

Britain decided to cut the maximum stake on fixed-odds betting terminals to just 2 pounds from 100 pounds aiming to tackle problem gambling.

Here are the latest activities from bookmakers in response to the potential opening up of U.S. markets:

SPORTECH (ROD.L):

British pool betting operator and technology supplier Sportech (ROD.L) on May 31 signed a commercial sports betting agreement with Sportradar AG, a supplier of sports and betting-related live data, to start fixed-odds sports betting operations in the United States.

The deal will allow Sportech, which already does business in Connecticut, New Jersey and Georgia, to offer Sportradar’s products to its 90 licensed operator business clients and other eligible operators in states where sports betting activity is permitted.

The British bookmaker, which already has over 100 full-service and kiosk locations in Nevada, said on May 29 it would tie up with Ocean Resort Casino, New Jersey to bring sports betting to the resort.

Pending legislation and regulatory approvals, William Hill said it would operate a 7,500 square-foot (697 square-meter) gambling area at the resort allowing wagers on sports such as football, basketball, baseball, hockey, soccer and tennis.

Paddy Power Betfair agreed on May 23 to merge its U.S. business with fantasy sports company FanDuel a week after the U.S top court verdict.

Under the agreement, Paddy Power Betfair will contribute its existing U.S. assets worth $612 million along with $158 million of cash to take a 61 percent stake in the combined business, with existing FanDuel investors owning 39 percent.

About: Shawn

Shawn Shah is an expert legal analyst, lawyer, and journalist.


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