Online sports betting in the US is exploding, and PointsBet just got a licence in New York
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Sports betting continues to make rapid ground in the US, as more and more states start to legalise the practice.
Bookmaker PointsBet (ASX:PBH) jumped 8% yesterday, after receiving a mobile sport wagering licence in the state of New York.
The New York State Gaming Commission (NYSGC) has recommended that PointsBet, along with eight other operators, be awarded a licence to operate mobile sports wagering in the State.
The eight other operators are FanDuel, BallyBet, BetMGM, DraftKings, Rush Street Interactive, Caesars, WynnBet and Resorts World.
The NY licence came following PointsBet’s pursuit of a license in Texas, after a failed application in Arizona.
The bookmaker already has a licence to operate in Ohio, Indiana, Missouri, West Virginia and Louisiana – through a partnership with Nasdaq-listed Penn Gaming Inc signed in 2019.
But New York’s expected to be the crown jewel, being one of the largest and most important states for sports in the US.
The company will now look to leverage on its exclusive partnership with NBC Sports to bring sports betting to the masses.
Sports betting has been heavily regulated in the US until 2018, when the Supreme Court struck down a 1992 federal law that prohibited gambling on sports in most states.
As of today, 12 US states have made sports betting legal, while another six have allowed some form of restricted online betting.
Other states are coming on board soon and all of a sudden, the US is fast becoming the holy grail for the sports betting industry.
For most companies wanting to enter the market, it will be a state-by-state grunt work to getting licences, as gambling is legislated at state level.
Recently listed Bluebet (ASX:BBT) for example, has named six priority US states for its initial entry: Virginia, Iowa, Colorado, Tennessee and Maryland, and Arizona.
“America is going to be a very competitive environment, and it will be very expensive for new players just to go in there without a database and without a brand,” CEO Bill Richmond told Stockhead previously.
“It sounds bizarre to say about the US, but they’re short in technology expertise in this area,” Richmond added.
There’s no doubt the US market has the biggest potential anywhere, and industry players are convinced that reward for entering the market outweighs any risks that exist.
To illustrate how big this could be, New Jersey alone handled US$1bn in sports betting in just the month of September, becoming the first US state to surpass the billion dollar mark.
Of that US$1b, almost 92% of the betting was done online, a stark figure that has lured some traditional gaming companies into entering the market.
Poker machines maker Aristocrat Leisure (ASX:ALL) for example, recently acquired UK-based Playtech, a sports betting software company, for $4bn.
“The business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online segment as they continue to open up, particularly in North America,” said Aristocrat chief executive Trevor Croker.
BetMakers Technology (ASX: BET) meanwhile, already has a foot in the door in the US, with the acquisition of online sports betting company Sportech in December last year.
The acquisition gave Betmakers access to Sportech’s 200 racetrack, casino and betting venues and partners across the US.
The market potential has also enticed a growing number of private wagering companies to attempt going public.
Betting data provider Racing and Sports is the latest Aussie company to initiate an IPO, having just raised $20 million.
The company says it wants to set itself up to ride the wave of fixed-odd betting, following the recent legalisation in the US.