Gam­bling, tech firms scram­ble for foothold in sports bet­ting

Jamaica Gleaner - - FINANCIAL GLEANER -

THE AN­TIC­I­PA­TION of le­gal sports gam­bling through­out the United States has prompted a flurry of deals among gam­bling and tech­nol­ogy firms who want a foothold in a mar­ket worth bil­lions.

Casi­nos, race­tracks, daily fan­tasy sports com­pa­nies and oth­ers are itch­ing to offer bets in per­son and on­line af­ter the Supreme Court ruled Mon­day that states could be­gin al­low­ing wa­gers. That’s led com­pa­nies all over the world to seek ways to team up.

Some casi­nos need mo­bile apps or some­one to set lines and run sports books that op­er­ate much differently than slot ma­chines and ta­ble games. Many tech firms, daily fan­tasy sports com­pa­nies and oth­ers need gam­bling li­censes and ex­pe­ri­ence with sig­nif­i­cant reg­u­la­tion. Other com­pa­nies that han­dle data se­cu­rity and pay­ment pro­cess­ing are also join­ing the fray.

The in­dus­try is pre­par­ing for most of the bet­ting to hap­pen on smart­phones, just like in Europe. That would also be new for most US states, as In­ter­net gam­bling has been lim­ited to just three states in re­cent years.

Le­gal­is­ing the in­dus­try

“This is a multi­bil­lion-dol­lar in­dus­try that has been op­er­at­ing in dark­ness and can now be brought into the light with le­gal­i­sa­tion and reg­u­la­tion,” said Richard Schwartz, pres­i­dent of Rush Street In­ter­ac­tive, which op­er­ates Su­garHouse On­line Casino, a gam­bling site for New Jersey res­i­dents that of­fers slots and ta­ble games.

Churchill Downs, the race­track that runs the Ken­tucky Derby, said Wed­nes­day it inked deals with a tech com­pany for its plat­form and the Golden Nugget casino in At­lantic City for its li­cence in New Jersey. It bought Presque Isle Downs & Casino in Penn­syl­va­nia in March and owns two casi­nos in Mis­sis­sippi, with plans to offer sports bet­ting in all three states.

Dublin-based gam­bling firm Paddy Power Bet­fair has an on­line casino in New Jersey, but is con­sid­er­ing merg­ing its US busi­ness with FanDuel, the pop­u­lar daily 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 need ex­per­tise on com­plex reg­u­la­tion if it hopes to gain a casino li­cence, 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 com­pany 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 in­dus­try, to act quickly and to ben­e­fit,” she said.

Ma­jor casino com­pa­nies MGM Re­sorts In­ter­na­tional, Cae­sars En­ter­tain­ment and Trop­i­cana En­ter­tain­ment (recently bought by El­do­rado Re­sorts) all an­nounced plans to offer sports bet­ting out­side Ne­vada, as did the soon-to-open Hard Rock and Ocean Re­sort casi­nos in At­lantic City.

AP

In this Mon­day, May 14, 2018 photo, bet­ting odds are dis­played on a board in the sports book at the South Point ho­tel and casino in Las Ve­gas.

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