The Americans are coming

One of the most fascinating outcomes of the repeal of PASPA has been the operator and supplier relationships that are beginning to form in the very early days of US sports betting. Kambi and SBTech have jumped out to an early lead, while the Stadium Technology platform acquired by Ladbrokes several years back has suddenly become a key asset in the GVC portfolio. But Paddy Power Betfair’s link-up with racetracks in New Jersey and New York was perhaps the most intriguing so far.

The deal will see Paddy Power’s trading, third-party platforms and the newly acquired FanDuel brand combined to give a new consumer betting proposition in partnership with the Meadowlands and Tioga Downs racetracks in New Jersey and New York respectively. It’s a hit-the-ground-running type of deal that allows all parties to make the most of the early momentum in New Jersey and potentially position themselves well for the opening of the massive New York market. But it raises as many questions as it does answers.

The main one of these is just who is the driving force here? And in turn what role will the major European operators be allowed to play in the expanding US sports betting market and how long the opportunity will remain open for them? When we talk of the gambling giants in Europe they tend to pale in comparison with those over the pond, but there is a sense that while they still look at sports betting as a curiosity and not a core revenue opportunity they can steal a march on both the B2B and B2C side of things.

Now, then, is the time to strike. As one senior executive at a major operator commented, there is no single bigger opportunity than the US market at the current time, and nobody will be pulling back any time soon. The end goal is a pure B2C operation, but the likely route in will be a joint-venture or some form of partnership with one of the major land-based stakeholders. And it’s not clear if some marriages made in haste will end up being repented at leisure in the years to come.

A lack of clarity for all

Because what’s problematic both for European firms and the US gambling giants is there is very little clarity on how sports betting will roll-out in the US. At the moment you can ask three experts and get six opinions, and all of them will be equally plausible. Some plans also depend on certain key states stepping up in quick order, not least New York, while others require rather more online access than currently appears on the table.

The confusion, however, presents opportunity. And while the big casino groups, and to some extent the major US suppliers, try and rapidly get their head around the nuances of an omni-channel sports betting future there are deals to be done. But to think this will remain the case for a long time, or even a short one, would be foolhardy and there are clear signs of what’s to come just from the early stages of this brave new world.

Rush Street Interactive’s deal in Colombia should have struck fear into an industry already pricing up yachts on the back of the US market opening. Here is a mid-tier US casino operator that has thought ahead, built its own platform and linked up with a modular sportsbook supplier to provide an end-to-end solution for a major international firm. This is the type of deal that would typically have gone to one of the Europeans but it’s now in the hands of a US land-based operator. Weren’t they supposed to be clueless here?

We’ve also seen something similar, if different, in the New Jersey online casino market where Golden Nugget has come from nowhere to be a major player in that market through some smart hires and a lot of leg work. To think this and the Rush Street model will be the exception rather than the rule might be thinking of the utmost level of wishful, not least in a market that will take years rather than months to build out into something of significant scale.

The big threat waiting

Alongside this, however, we have an even bigger threat waiting in the wings. The major US operators and suppliers will not want to play a supporting role in this play, even if they have to wait until the second act to get involved. There is a thirst for knowledge among the big firms at the moment and a huge amount of smart talented people gathering it with equally large amounts of capital to deploy once they have worked out their strategy for the space.

And if they can’t build it, you can be sure they will buy it. Scientific Games acquisition of NYX was the warning shot, and there is little doubt some of the bigger gaming groups will be willing to buy their way into a position of dominance should market conditions require it. There are no shortage of sportsbook technology providers and a number of operators who could potentially be targets not least while debt remains cheap.

Right now the European egaming sector feels like it’s at the start of something big, where it will be at the centre of a major growth market that will alter the very structure of the online gambling industry. And it may well be right. One thing is for certain, however. The Americans are coming. And everyone else needs to realise this sooner rather than later.