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Why The New US Gambling Market Has Arrived Just In Time For UK Betting Firms
In 2018 the Supreme Court in America introduced a ruling that made it legal to take bets in the States once more. Since then, state by state the market is opening up and many are predicting a gold rush as an estimated $150 billion in stakes laid at unregulated betting sites moves to the new licensed market. This is a huge opportunity for companies in the territory to take advantage of, and it’s one that their competitors across the Atlantic are eyeing-up too. After many years of unchecked growth the UK gambling market is facing big challenges. So what has changed? And why is the new US sportsbook and casino market coming just in time?
New Stricter Regulations
Historically the relationship between state and bookies has been a turbulent one. It is often characterised by periods of liberalisation followed by excessive regulation. Right now, the UK is coming to the end of an era of freedoms that were originally established in the 2005 and 2014 Gambling Acts. These two pieces of legislation established the framework in which the industry experienced massive growth so that now over £14 billion is generated each year in gaming yield. This staggering number has been driven by huge advertising spends and prolific growth in the number of gambling sites available online. With little or no restriction on when, where and how much they can bet, the UK population has taken to betting in big numbers.
Now, those who are arguing for reform claim that there is an addiction crisis of epidemic proportions and stricter regulation is needed in the form of a new gambling act. Official figures on how many people suffer from a gambling problem in the UK vary from less than 1% to 2.7%. Increasingly the British media has published stories of individuals who racked up massive debts betting online, with an emphasis on the failure of the operators to identify those who are gambling too much and to close their accounts.
This June a parliamentary committee will report back after a year-long investigation into the social impact of gambling and is expected to recommend some pretty far reaching reforms that will have a serious impact on the revenues of betting firms. Amongst the more severe regulations being proposed are restrictions on how much gamblers can deposit each week and how much they can bet on games like online slots. These two measures alone would have a serious impact on the overall gaming yield as they would affect the biggest spenders whose contribution to company revenues is known to be very significant.
Reformers in the UK are also looking to ban widespread and pervasive advertising online and at sporting events in an effort to end the ‘normaliation’ of gambling and reduce exposure to betting brands for those under the legal age or with gambling problems. The UK’s own Premier soccer league is rife with deals between betting companies and clubs, and live broadcasts are interspersed with ads for the latest in-play bets.
This summer a debate will begin over how the UK betting market should look in years to come. Reformers say the original acts of 2005 and 2014 are no longer fit for purpose. The industry say reforms must be undertaken carefully or punters will be pushed to unregulated casinos with little or no responsible gaming features. This response may be somewhat disingenuous but it illustrates the fear in UK businesses that they face a serious threat to their revenues.
In this climate, the new US market is arriving just on time.
Bringing Experience To The Market
To establish a position in America, UK firms are teaming up with gambling brands in the States. GVC have signed with MGM, whilst their big rivals Paddy Power Betfair have bought Fan Duel, the fantasy sports betting brand. Coming from a mature market with great experience in how to manage customers and optimise their spends, these companies are in a strong position to make the most of the opportunities provided by the new rulings.
In fact, the whole UK industry is gearing up for an assault on the states. Alongside operators, some of the biggest affiliate businesses, a crucial advertising channel for bookmakers, have already established themselves, whilst smaller SEO agencies, online slots comparison sites, and sportsbook PPC marketing specialists, are also looking to bring their considerable expertise to this significant market.
The race is on to take a share of a considerable pie and UK firms are primed now to cash in and offset the losses from regulation and market saturation in their home country.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes