2020 promises to be a huge growth year for UK gambling companies.
With the legalisation of online gambling in Europe, the US and other countries, now seems as good a time as ever to invest in gambling stock.
Legal sports betting in the US
After years of uncertainty, the US Supreme Court decided that the federal ban on sports gambling was unconstitutional. This took place in May 2018, giving each state the individual right to legislate sports gambling according to its own laws. The Court also clarified the 1961 Wire Act, prompting states decided to regulate online gambling.
Until now, 17 states have already legalized sports gambling. 12 of them already are accepting wagers. 6 states have even legalized online casino gambling as well. With almost a year of data, it is clear that the US will soon become the largest online gambling market in the world.
A huge opportunity for European and UK gambling companies
With no companies with any track record in online gambling coming from the states, it is easy to see why European companies were among the first to explore the new market. DraftKings and FanDuel were among the first to venture. While DraftKings went the route of fantasy sports, Fanduel chose sports betting. With Financial backing by Paddy Power Betfair (a merger of two of the UK and Ireland’s biggest betting sites) Fanduel is now competing for a market share of each new state that opens up to legal online sports betting and casino.
William Hill is also becoming a formidable player in the US, competing with other gambling conglomerates like bet365, Unibet and 888, for a slice of the American gambling pie. As the market explodes, expect to see a huge payday for shareholders.
Other markets in Europe
Plenty of other European countries are moving from grey markets to white markets. This means that they now have legal online casino and sports betting, provided the site holds a licence from the country where the games are played. This is good news for licenced sites in their various territories, while sites that cannot or do not want to obtain a licence will be left in the dark. Italy is a good example, and we have seen Bet365 climb to the top of this newly regulated market. Read More about Bet365 Casino here. Sweden, Germany and the Netherlands are currently laying out criteria for obtaining licencing as well.
Big boost for software developers
The recent increase in legalized gambling is also a huge boost for UK software developers. Most online casinos do not develop their own games, instead they licence games from various software developers in return for a share of the revenue these games generate. Software developers like NetEnt, Microgaming, IGT, Aristocrat, Scientific Games and SB Tech all have UK offices and play a big part in the formation of new online casinos. American gamblers will soon be able to play the same games as UK punters. That is more revenue in the pockets, with little to no extra cost for game companies.
It is too early to tell the full extent of what legalized gambling in various states and countries will have on gambling stock in 2020; however, the early signs are more than encouraging. Many territories are doing much better than anticipated and we are looking forward the numbers from frontrunner states like New Jersey, Pennsylvania and Indiana. These will be a strong indication of how other US states with legalized gambling will perform. These numbers will ultimately affect future prices of UK gambling stock.