Sports betting in the UK is at a record high. The Gambling Act of 2005 saw the laws imposed on sports betting companies relaxed to allow these establishments to be far more visible to their prospective market. Television advertising was no longer banned, and with this new freedom the market saw a boom. From 2007 to present day 2018 the value of the sports betting industry has almost doubled. The majority of these companies are now listed on the London Stock Exchange, but just what impact do these companies have on the British equity market?
Changing Laws, A Boost
When companies list themselves on something like the London Stock Exchange they are generally doing it in an attempt to raise capital for the company. This is done by making a percentage of the company available for ownership in the form of shares. With the general public buying shares in the company it in turn earns the company more money. Sports betting companies are no different, and many of them have done just this.
However, due to the boom of online sports betting over the last decade more and more online sportsbooks are joining the LSE. And now, with laws changing across the Atlantic in North America, the value of British sports books is relentlessly rising in value. The United States of America has had a century long federal law that prohibited sports betting, known as the PASPA, but the Supreme Court recently lifted these restrictions and it is now up to each state to determine whether they will capitalise on what could be too great a financial opportunity to pass on.
Indeed, some British sportsbooks have already pounced on this sleeping giant. GVC Holdings, the parent company of giant sports and gaming brands, with PartyCasino, Ladbrokes, Coral only naming a few, has already struck a deal to supply sports betting technology in the state of Delaware. GVC Holdings will be using their brand Stadium, which is already prominent in the state of Nevada where sports betting has been legal for decades. In fact, it is accepted that betting companies will benefit from PASPA being no more.
Bringing Value to The LSE
On the day that the Supreme Court overturned the law prohibiting sports betting there was a surge in value of sports betting companies listed on the LSE. In fact, with the news released with only an hour of trading left in the day, Paddy Power Betfair and William Hill managed double digit gains. With multiple states now certain to open up opportunities to UK bookmakers it will only see the value of these companies continue rising.
America isn’t the only nation opening the doors to UK sportsbooks. Canada, which is following in the footsteps of their neighbors to the south, will also surely be receptive to companies servicing local punters. Africa is also proving an enticing market, with companies such as Betway investing in what has so far been unchartered territory.
With the boom of these companies set to continue into the foreseeable future it will only make the LSE more appealing, attracting traders looking to invest in an industry which seemingly has a very bright futuRE.