The US is being viewed as the next area of consolidation for European betting companies, with markets anticipating gambling legalisation to sweep the country over the next few years, writes Geoff Percival.
A ruling on the future of the so-called Bradley Act — or the Professional and Amateur Sports Protection Act (PASPA) — which outlawed sports betting in the US, save for a few states, in 1992 — is due in the second quarter of the year.
There is a feeling that it will be scrapped, essentially paving the way for multiple states to legalise sports betting.
Barclays gaming analysts see there being “a good chance” of PASPA being repealed. However, they ultimately see regulation being undertaken on a state-by-state, rather than federal, basis.
“If the US market regulates on a state-by-state basis, we think US land-based operators will need to improve the sophistication of their land-based/online sports-betting platforms. UK-based betting companies are some of the most sophisticated operators globally. We would not rule out the potential for further sector consolidation,” Barclays said.
Opportunities already exist, but European operators are still more focused on this side of the Atlantic. Last year, Paddy Power-Betfair added to its existing US operations — an online casino offering in New Jersey and its TVG online horse-racing vehicle — by spending nearly $50m on Draft, a New York-based company that takes bets on fantasy sports league movements.
Former Paddy Power boss, Breon Corcoran, recently downplayed the importance of the US, saying “we think there’s an awful long way to go, from where we are today to a legalised framework for sports betting that’s accessible to offshore operators. We still think sports betting, as we know it in Europe, is a long way away [in the US]”.
It remains to be seen how new Paddy Power chief executive, Peter Jackson — who officially took over the running of the company this week — views the US.
But Barclays thinks there’s a dormant industry at stake, which could contribute $22.5bn to US GDP per annum.
It said growth in the fantasy sports-betting market has opened up the regulation debate; that US President, Donald Trump, supports regulation and that consumer sentiment has shifted away from supporting a ban; and that betting could help revive flagging television viewership figures around major US sports events.
Barclays also noted that New Jersey’s challenge to PASPA is being heard by the US Supreme Court. Nearly three-quarters of its appeal cases result in a change of law, it said.