The US has ended a 26-year ban on sports betting, opening up the lucrative market – which the American Gaming Association estimates currently involves $150bn in illegal and offshore wagering – to both US and international companies.
Instigated by New Jersey’s bid to introduce legal sports betting, the ruling from the Supreme Court erodes the 1992 federal law that prohibited Americans having a flutter, and paves the way for each state across the country to pass betting laws as it sees fit. Until now, only Nevada was fully exempt from prohibition.
The ruling has sent share prices of industry players soaring, with Scientific Games Corp [SGMS] seeing a 15.7% gain as investors moved quickly. Headquartered in Las Vegas, the company is particularly well-placed to capitalise on the legal changes having acquired Canadian digital gaming and sports betting firm NYX Gaming Group in January.
Value of illegal and offshore betting in the US
Following New Jersey’s victory, Delaware was the first state to act on fully legalising sports betting. With a population of just 962,000, it took over $300,000 in bets on the first day of legalisation. New Jersey soon followed in time for the World Cup, as did Rhode Island.
Delaware-based Dover Downs Gaming & Entertainment [DDE] was up 21% on 1 June as investors looked to capitalise on the 14 May decision.
The ruling will offer opportunities for gambling companies around the world – including many from the UK – to make strides across the Atlantic.
Value of bets taken by William Hill in New Jersey during the first two weeks of legalisation
Shares in British company William Hill [WMH] rose 10.1% after the ruling. It had been working closely with officials in New Jersey in the run up to the decision. The state alone is believed to represent a $500m market.
Paddy Power Betfair [PPB] rose 15.3%, and has big plans for expansion in the US. While GVC Holdings, which owns Ladbrokes Coral Group, was up 8.0%.
Canada’s The Stars Group [TSG] – which recently took a 20% stake in Britain’s Sky Bet – was 13.4% higher, and Italy’s International Game Technology [IGT] was up by 4.9% on the day of the ruling. Caesars Entertainment Corporation [CZR], which operates 47 casinos in 13 states, was up 8.6%.
British Invasion - The UK firms heading across the pond
William Hill (WMH)
Already holding substantial assets in Nevada, William Hill is uniquely positioned to take advantage of the opportunity. It took $16m in bets in New Jersey during the first two weeks of legalisation in the state.
Recently announced a move into US sports betting through a partnership with Atlantic City casino.
GVC Holdings (GVC)
The owner of Ladbrokes Coral announced on 30 July it would be teaming up with MGM Resorts International to launch an online betting platform, with each investing $100m. The news sent GVC stock soaring to an all-time high.
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