UK Gambling Firms Eye U.S. Expansion

As the spectre of Brexit continues to loom large over the British economy, many have questioned the potential impact on the nation's lucrative iGaming market. These concerns have been exacerbated by the creation of online poker liquidity pools between European Union members, with France and Spain the first to sign such an agreement in January.

As a result of this, British firms have begun to look across the Atlantic for new opportunities both on and offline, with a number of recent developments offering tremendous encouragement to gambling firms based in the UK.

We'll address these in further detail below, while asking whether UK companies can profit by entering the American marketplace.

Appraising Recent Changes in the U.S. Market

Most recently, Michigan became the fifth U.S. state to legalise online gambling, following a trail that was initially blazed by New Jersey, Nevada and Delaware back in 2013. This development also came hot on the heels of Pennsylvania's decision to legalise virtual gambling, with Governor Tom Wolf signing an extensive bill into law last autumn.

Additionally, the U.S. Supreme Court also made a landmark ruling recently, which enabled further states nationwide to legalise the practice of sports betting without exception.

More specifically, it upheld and endorsed a 2014 New Jersey state court ruling that permitted sports betting at casinos and horse racing venues, while simultaneously overturning a 1992 federal law that banned the practice as a whole.

Historically, sports betting has been opposed by a number of sporting organisations (including the NBA), who felt that legalised gambling could interfere with the integrity of their individual competitions. However, the Supreme Court decided that the legalisation of sports and online betting should be determined by federal and state legislatures, rather than inside a courtroom.

So, while Congress will retain the autonomy to pass federal laws that relate to sports betting and online gambling, individual state authorities can continue to regulate independently until such a time arises.

What do these Changes Mean for the UK?

From the perspective of British companies, these developments have already caused stocks to surge, with both Paddy Power and William Hill having seen their share values increase exponentially in a short period of time.

In fact, we've already seen the former company announce that it has reached a deal to acquire the U.S. fantasy sports firm Fan Duel, as it looks to secure a viable foothold within the American market.

With five U.S. jurisdictions having now moved to allow sports betting and online casino gameplay within state limits, there's also a greater potential for these entities to join larger and more lucrative liquidity sharing pacts of their own. Last autumn, we saw New Jersey, Nevada and Delaware sign an historic pact, for example, with Pennsylvania set to join this later in the year.

With Michigan now likely to enter into this agreement and states such as West Virginia and New York also on the cusp of legalising sports betting and online gambling, the value and the appeal of the American gambling market continue to grow at pace.

By leveraging its immense regulatory expertise, the UK Gambling Commission (UKGC) may also look to enter into this agreement and create a revolutionary, trans-Atlantic liquidity sharing pact (after failing to achieve this objective back in 2015). This will provide British firms with a direct connection to the U.S. marketplace, while enabling them to tap into the very latest technology and a sector that is likely to grow exponentially in the near-term.

The Last Word

While Brexit undoubtedly poses a threat to the UK economy and the booming iGaming industry, the growth of the American market has created a significant number of opportunities for British-based operators.

The creation of a liquidity sharing pact between various U.S. states may well be the most beneficial of these, as UK operators look to lend their own expertise to the market and forge lucrative partnerships with companies outside of the EU.
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