The anticipation of legal sports gambling throughout the United states of america has prompted a flurry of deals among gambling and technology firms who want a foothold inside a market worth billions.
Casinos, race tracks, every day fantasy sports companies and others are itching to offer bets in individual and online after the Supreme Court ruled Monday that states could begin allowing wagers. That’s led companies all over the world to seek methods to team up.
Some casinos require mobile apps or somebody to set lines and run sports books that operate a lot differently than slot machines and table games. Many tech firms, every day fantasy sports companies and others require gambling licenses and experience with substantial regulation. Other businesses that handle information security and payment processing are also joining the fray.
The business is preparing for most of the betting to occur on smartphones, just like in Europe. That would also be new for many U.S. states, as internet gambling has been limited to just 3 states in current years.
“This is a multibillion-dollar business that has been operating in darkness and can now be brought in to the light with legalization and regulation,” said Richard Schwartz, president of Rush Street Interactive, which operates SugarHouse On-line Casino, a gambling site for New Jersey residents that provides slots and table games.
Churchill Downs, the race track that runs the Kentucky Derby, said Wednesday it inked deals with a tech business for its platform and also the Golden Nugget casino in Atlantic City for its license in New Jersey. It purchased Presque Isle Downs & Casino in Pennsylvania in March and owns two casinos in Mississippi, with plans to provide sports betting in all 3 states.
Dublin-based gambling firm Paddy Power Betfair has an online casino in New Jersey but is considering merging its U.S. business with FanDuel, the popular every day fantasy sports company, in a deal with clear upside for both sides. Betfair would gain a well-known American brand with millions of customers built on technology that could be used for sports betting. FanDuel, meanwhile, would require expertise on complex regulation if it hopes to gain a casino license, a move that most fantasy sports companies tried for years to avoid by arguing that fantasy sports doesn’t amount to gambling.
Anticipation of the ruling even prompted some companies to squash their differences and focus on the potential windfall. London-based bookmaker William Hill had threatened to use its stock to derail a buyout between two online gambling infrastructure firms in Las Vegas. But it later agreed to support the purchase of NYX Gaming by Scientific Games.
The opportunities are vast for companies that can help customers turn from illegal bookies and offshore operations, said Laila Mintas, deputy president of Sportradar, a New York business that works with more than 70 sports federations and leagues around the world on fraud detection, including the NBA, NHL and MLS.
“It opens the door for all different stakeholders such as the states, the leagues, the casino and lottery business to act quickly and to benefit,” she said.
Mattias Stetz, Rush Street’s chief operating officer, stated it plans to provide traditional betting on final scores, along with betting on developments within each game like which group will score next or who will commit the next foul. That’s the fastest growing segment of sports betting and popular in Nevada, the only state that had been taking single-game sports bets before the Supreme Court ruling.
Major casino businesses MGM Resorts International and Caesars Entertainment and Tropicana Entertainment (recently bought by Eldorado Resorts) all announced plans to provide sports betting outside Nevada, as did the soon-to-open Hard Rock and Ocean Resort casinos in Atlantic City.
David Katz, equity analyst at Jefferies, stated Penn National Gaming and Caesars Entertainment are inside a better position than their peers because of their numerous locations in multiple states, “particularly where there is really a high probability of sports betting becoming legal sooner rather than later.”
Caesars is inside a particularly advantageous position, he stated, because it has been doing its own bookmaking for years, combining experience having a large amount of volume.