There is plenty of reason to believe that US sports betting will be legal at least in some states sometime in the not-too-distant future.
If you’re reading the tea leaves, perhaps the best example of that is gaming and sports betting companies preparing in earnest for an expanded US market.
That’s become very visible in recent weeks in two ways: William Hill‘s attempt to block the acquisition of NYX Gaming by Scientific Games and Stars Group‘s intent to go on a so-called “acquisition spree.”
William Hill vs. Scientific Games
In September, gaming giant Scientific Games announced it was acquiring NYX. The move was done largely with the potential US market in mind, with NYX’s sportsbook product a logical way for Scientific to get into the sports betting business in the US.
“NYX’s digital Sportsbook can be seamlessly delivered throughout Scientific Games’ global gaming and lottery networks in existing and future regulated US and global markets,” Scientific said via a press release at the time.
That acquisition however, has triggered wrangling in court. William Hill, which is a shareholder in NYX, has moved to block its acquisition.
NYX detailed what’s going on in a press release:
NYX also announced that it has filed an action in the Chancery Division of the Superior Court of New Jersey, Atlantic County against William Hill Steeplechase Limited and William Hill Plc (together, “William Hill”) and certain of William Hill’s officers and directors. NYX alleges that its shareholder William Hill has engaged in wrongful conduct in violation of the New Jersey Antitrust Act in attempting to block the Acquisition, which will bring great benefits to the nascent regulated sports betting industry.
The complaint seeks injunctive relief, treble damages and attorney’s fees for violations of the New Jersey Antitrust Act, and also alleges tortious interference with economic advantage, and tortious interference with contract, and seeks punitive damages.
Why for William Hill?
William Hill is already in the US via the Nevada sports betting market, and it obviously has designs on getting into other states as it becomes legal to do so. Since it has a way to slow the progress of a potential competitor in those states, it’s no surprise it’s doing what it can to make things difficult, although it denies it is doing anything wrong, per the Telegraph:
William Hill said it was still considering the the proposed acquisition of NYX by Scientific and that it “refutes in the strongest terms that any anti-competitive measure has been requested or is being demanded”.
An NYX shareholder meeting is set for next month. A court date from the NYX action has not yet been set.
NYX, Scientific moving forward
In the same release from above, NYX announced today that it entered into an exclusive agreement with Scientific Games for “the development and distribution of a new sports betting platform in the United States.”
“This agreement represents an important step forward for NYX as we continue to position ourselves for greater expansion in the North American market,” said Matt Davey, Chief Executive Officer of NYX.
“As evidenced by the recent positive legislation for online gaming in Pennsylvania, the market potential continues to grow, and Scientific Games provides a fantastic partner to take advantage of these opportunities. We are excited to move forward at pace in this market.”
Pennsylvania just enacted a sports betting law that would take effect if and when the federal ban is lifted.
Stars Group eyes sports betting, too
Stars Group — the parent company of online gaming giant PokerStars — is also stirring to action. Reuters reported that the company is looking to raise $2.5 billion to back its designs on acquisitions.
CEO Rafael Ashkenazi “said he is looking at buying either one big company or three to five small-to-medium companies,” per Reuters.
What would those targets be? The company is already in the sports betting vertical, but acquiring another company that specializes in it would certainly make a lot of sense. GVC and William Hill are logical targets that would help PokerStars make further in-roads in the US market.
It all boils down to New Jersey for the short term
But everyone’s getting ready, because getting a fast start in the US sports betting market could be vital for success. Insight from a sports betting conference taking place this week:
1 big takeaway from #SBUSA17; rooms were overflowing, but more than 60% were not from US; and could count on both hands amount of people who had been to a #sportsbiz event in US before. New audience, new oppts, new jobs for folks. #DFS #sportsbetting #esports #gambling pic.twitter.com/vHl8NIUqno
— Joe Favorito (@joefav) November 15, 2017
The moves we’ve seen from the companies above are just the tip of the iceberg.