International edition
August 20, 2019

GVC, William Hill, Flutter Entertainment, 888 and Boyd

Five companies' stock expected to boost from expanding US sports betting

Five companies' stock expected to boost from expanding US sports betting
According to MarketWatch, there are four UK stocks, and one from the US, that investors should watch as the US sports betting market looks set to boom.
United States | 07/19/2019

Four of them are from the UK, have struck lucrative partnerships with US giants, and make moves before the NFL season starts in September. Among the highlights are the tie-up between GVC and MGM; William Hill and its US partner Eldorado; Paddy Power Betfair acquiring FanDuel and rebranding; 888 with its sponsorship deal with an NFL team; and Boyd Gaming partnering with MGM and FanDuel.

T

here are top five companies in the US set to boost their stock markets just 12 months after the first legal sports bets were placed in New Jersey in June last year. Earlier this week, New York became the 10th state to join the business after Rivers Casino began taking wagers.

UK gambling companies, experienced in sports betting, have struck lucrative partnerships with US giants across the pond. The newly-paired betting giants, along with individual states, are making moves ahead of the new NFL season in September.

PASPA’s repeal by the Supreme Court opened the door for the estimated $400 billion black market to become mainstream. New Jersey gamblers waged nearly USD 3 billion over the past 12 months in the wake of the first bet, but expectations go further.

According to MarketWatch, there are four UK stocks, and one from the US, that investors should watch as the US sports betting market looks set to boom: GVC, William Hill, Flutter Entertainment, 888, and Boyd Gaming Corporation.

GVC

The expectations are related to the tie-up between MGM, the biggest casino operator in the US, and GVC, the owner of UK betting powerhouse Ladbrokes Coral. Joint venture chief executive Adam Greenblatt expected a potential market of “really avid sports fans” that is 75% larger than the UK to emerge within a couple of years.

On Wednesday, GVC reported 16% online revenue growth in the second quarter, helping to offset UK retail woes. The company also confirmed its New Jersey full online launch was on track for the start of the NFL season.

GVC bosses have championed the “power” of the combination with MGM, which pulls in more than $4 billion in revenue just from Las Vegas.

William Hill

William Hill and its US partner Eldorado both have analysts backing the stock with overweight ratings almost across the board. The partnership, launched in September last year, brings William Hill’s sports betting nous together with Eldorado’s 23-million strong customer base and casino portfolio.

Eldorado’s $17.3bn deal to buy rival gaming group Caesars Entertainment last month has further boosted the UK company. Earlier this month William Hill announced plans to close 700 shops following a crackdown on fixed odds betting terminals, sparking suggestions it could pump more cash into its US expansion. A new technology platform will also be launched in time for the new NFL season.

Flutter Entertainment

Paddy Power Betfair last year acquired US fantasy sports provider FanDuel. The company, renamed Flutter Entertainment in May, increased US revenues by 47% to £78 million in the first quarter and has continued to plough investment into its sports betting strategy.

FanDuel’s 50% sports betting market share in New Jersey, where online gambling is legal, was a key driver of growth. Chief executive Jeremy Peter Jackson said he was focused on driving home that “unfair advantage”. Flutter is poised to launch online in Pennsylvania and continue to grow as more states are given the green light.

888

888 has also ventured into the US sports space, opening a sportsbook in New Jersey with 20 employees. It became the first online gambling company to pen a sponsorship deal with an NFL team — the New York Jets.

The company has also mapped scenarios for the future of gambling in the US. Even in a bear scenario, in which only a handful of new states legalize online gaming, the US would shoot up to second place globally by 2025 behind the UK. The Gibraltar-headquartered company has been selective in launching in European markets as and when they have been regulated and plans to do the same in the US

Boyd Gaming Corporation

The company has positioned itself strategically through a number of acquisitions and partnerships in a bid to take advantage of the sports betting surge. The gaming company partnered with MGM last year to share online and mobile gaming platforms, and has also struck a strategic partnership with Flutter subsidiary FanDuel.

The casino operator, whose shares have risen 26% so far this year, has also opened two sportsbooks in its Mississippi venues and plans to open four more at its venues in Iowa and Indiana.

Leave your comment