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Gambling Deals Across the Oceans: UK & USA

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Whether you’re in the US or the UK, gambling is big business. The US online gambling market has been predicted to experience a compound annual growth rate of 15.41% between 2021 and 2025. Prior to this, a report by the American Gaming Association had announced that casinos generated more than $43.6 billion in 2019, so there’s a serious appetite for gambling out there.

Meanwhile, in Britain, the UK Gambling Commission has published statistics that show that even though people in the UK also enjoy a flutter and spend sizable sums on gaming, there has been a small decline. The £14.2 billion gross gambling yield from April 2019 to March 2020 was a marginal 0.6% decrease on the same period before. Remote gambling reveals itself to be the biggest sector by GGY, comprising 39.9% of the overall market.

A new era of cooperation

Despite land-based gambling being ever so slightly on the decline in the UK and some establishments having started to close in 2020, it still remains a global leader for online gambling. The UK is host to hundreds of online gambling providers offering their casino games to UK citizens, ranging from online slots to online roulette and poker. With so many providers already established in the UK market they are now looking at other territories across the world where they can offer their gambling games and services to others.

The 2018 ruling by the US Supreme Court that permitted states in the US to legalise sports betting in their states has encouraged the eyes of UK operators to look into specifically the US market.

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Could the gambling industry be seeing a new era of cooperation and business dealings between US and UK operators?

Bet365 were quick to move in on casino host Empire Resorts. With an investment of $50 million dollars, the company became the biggest shareholder in Empire Resorts.

Another company who were fast out of the blocks were 888 Holdings. The business bought up the remaining 53% in the All-American Poker Network. Previously, it had been a joint venture they’d established in 2013.

A two-way street

The gambling industry has already been a hotbed of gossip in 2021 after the renowned operator MGM Resorts made a bid for the UK Gambling company Entain, which owns Ladbrokes and Coral.

Earlier in January 2021, the operator had offered a substantial £8.1 billion, but the company had said no. Entain believes the business is worth closer to £10 billion.

Under UK rules, MGM would have to wait another six months now before they can make a bid. However, the operator has said it won’t be upping its offer.

Of course, the rejection of the bid may come as a blow to MGM Resorts, but possibly also to Entain. Before the news, shares in Entain had closed up by 25% at one point. Investors were confident MGM may have increased their bid.

MGM aren’t the only US operator to have fancied their chances at bagging a bargain in the UK gambling market. In September 2020, giants Caesar Entertainment agreed on a takeover deal to purchase William Hill for £2.9 billion. The company already owns a 20% stake in William Hill’s US operations and said it will be integrating the business into Caesars with minimal job cuts.

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Caesars weren’t alone in their interest in William Hill, however. Private equity firm Apollo had also made a takeover bid, but Caesars had highlighted to William Hill that selling to Apollo would jeopardise the joint venture that already existed between the British bookmaker and the US gambling industry titans.

Not all is as it seems, however

Part of the reason for some of this cooperation has been the requirement of US state laws for British companies to go into partnership with local operators who hold the limited licences. On the surface, everyone has been happy with the arrangement, but not everything is as it seems.

Experts have commented that the sports betting market in the US is a hive of activity and the belief is that you need to get in early and establish spots. Valuations are incredibly high.

Analysts have pointed to the fact that the US market has been moving tremendously fast and operators are no longer happy sharing all the spoils. They don’t feel they have the time to build the know-how and, instead, are feeling it makes sense to just buy out their British partners and, this way, acquire the skills and expertise more quickly.

Can the industry expect to see more of this?

The US Supreme Court’s decision to give states their own say in whether they allow sports betting or not in them was a landmark decision. Some states, such as New Jersey, who won the decision, wasted no time in legislating it and several other states have all clamoured to get sports betting going. The opportunities for revenue are immense and many don’t want to miss out.

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And it’s not just betting companies with which the industry might witness transatlantic alliances.

 In the later part of 2020, William Hill got busy again and became the sports betting partner of CBS Sports.

Just before the start of the fantasy football season, the two companies announced the deal and the UK bookmaking company will provide a wide variety of digital content on CBS Sports platforms. As well as data, the partnership would also see fans receive access to tool such as bet and prop calculators. The deal was the first of its kind in a new era of collaboration between sports betting operators and sports media. Exciting times lie ahead and companies on both sides of the Atlantic are spotting opportunities. It will be interesting to see what the next deal will be.

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