Overseas operators are beginning to feel the effects of the recent decision by the Supreme Court of the United States to legalise sports betting, an industry estimated to be worth $2 to $5.8bn. In one fell swoop, the decision has allowed each US state to make its own decision regarding the legality of sports betting, simultaneously strippingNevada of its monopoly.
Globally, the total value of the sports betting market is difficult to estimate because of the lack of consistency in regards to regulation. But what is clear is that betting makes up approximately 30 to 40% of the global gambling market and is a multi-billion-dollar industry.
Many are already celebrating this decision, which will likely have a drastic impact on the betting business across the country. Although sports betting was considered an illegal activityprior to the recent U.S. Supreme Court ruling, a 2017 survey reported by Statista found that almost 50% of people aged 18 years and over in the United States have placed a bet on a sports event at least once.
While legalisation has the potential to open new markets, reach new audiences, and boost betting frequency from current and past bettors, the ruling also raises many challenges including the proper vetting and verification of people placing bets online.
Smart regulations and sound identity verification processes areinstrumentalto ensuring secure and safe betting transactions, preventingunderage gambling, protecting both bettors and betting firmsand empowering law enforcement toprotect against illegal gambling and fraudulent activities.
Overall, the opening of the US market represents an opportunity to engage newsports fans, increasing the revenue of gaming firms around the world. In the UK and Ireland, companies such as Paddy Power Betfair are already making their moves to merge with US betting companies in order to stake their claim.
The Dublin-based online bookie will absorb the $1.2bn American fantasy sports site, FanDuel, giving it a total of 61% ownership of the company. With more than seven million users, FanDuel currently holds a 40% share of America’s daily fantasy sports pie.
This acquisition is the first big betting buy-out since theU. Supreme Court decision, but it’s likely more will follow. However, with these US procurements comes the need to verify US bettors in order to meet a number of compliance regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) rules.
Ensuring that these regulations are met is the smart bet for firms wanting to protect their customers, brand and business interests. The risks associated with non-compliance are exceptionally high, as evidenced by two UK-based betting firms – William Hill and 888 Holdings. Both had severe fines – totaling between £6 and £8m –levied against them earlier this year for breaching AML and social responsibility regulations.
Subsequently, both firms have hit the headlines again following the Supreme Court’s decision – but this time, in a more positive light. Since the announcement, share values in 888 Holdings have increased by 15%, while William Hill showed gains of 10.7%. William Hill chief executive Philip Bowcock told The Guardian that he welcomed the Supreme Court’s ruling and William Hill was actively working on becoming operational in multiple US states.
“Now, all attention shifts to the States, where steps have already been taken to prepare for this day. Legalised sports betting means that consumers and sports leagues will have greater protection, states will benefit from the raising of taxes and there is the potential for over 100,000 jobs to be created,” Bowcock said.