A look into America 2019 – Market Growth

I Think the hype is real actually but it’s not going to be as quick as everybody said and it’s going to be different. Sports in the US are much more about entertainment than just a you know short game like a soccer game here is 90 minutes pic halftime Whereas in the U.S games can be between two hours and four hours. There’s a lot of breaks There’s a lot of razzmatazz and entertainment and it’s the same and when you go into casinos in the U.S. It’s much more about entertainment. There’s sports books in the U.S, you’ve got a bar, they’ve got TVs everywhere they’ve got prices coming through in real time. You go to a betting shop in the UK, It’s much more transactional and while it gives a good experience to customers, it’s not quite at the same level.

Well, I think if you look at people outside the US, number one. They don’t necessarily understand what our policy making legislative process is and I don’t think they realize how slow it might be. There is a sense of this ‘Gold Rush’ mentality that we’re going to get in there and do that but it’s going to be a bit of a slog It’s going to take a little while for all of those various states to to number one go through the education process. These are state legislators that really have absolutely zero knowledge about this and how it works. So it’s going to be a it’s going to be a long haul.

I think people’s expectations need to be tamp down a little bit about how quickly this is going to come to pass it’s coming If you talk to ten people you get 10 different estimates but the people that have had that direct experience with sports betting in America prior to UIGEA coming through those people that have experienced the power of the US market are the ones that are putting the most optimistic estimates out there. I think in five years the The sports spenders in America will have calmed down and it’ll be less hysterical than they are now. One tiny thing goes wrong at the sportsbook and you know, There’s a front-page article in The New York Times about how the U.S. is failing at sports betting But I mean, it’s just it’s just kind of ridiculous people make honest mistakes.

It’s a new market, they don’t have the same experience that we have in Europe to run regulated sports betting. They literally just just the people are not there. So everyone’s essentially being trained up from scratch. So I think in five years whether it’s you know 10 or 20 states that have sports betting it’ll just it’ll just calm down and be much more normalized lets just bring us down to UK numbers here. So, New Jersey has a population slightly smaller than Greater London and Nevada has the population combined of Kenton East Sussex and Delaware has a population equivalent to Berkshire.

And those are the three legalized online betting online gambling States, but California is the size of Germany, correct? But that is way off as all we know so having looked at all The legislation is in the process of review and drafting in a minute realistically you and I might have a different opinion here. I think even when we get the likes of, New York, Michigan, Illinois coming on board would but may only be looking at a realistic market of 81 million people in the US perhaps within the next five years. Obviously, it could be less, it could be a lot more.

But that for me would be a realistic expectation. And I know we’re going to get to this point in a bit, but that leaves 250 million Americans with no place to go and bet on sports online anytime soon, except the offshore one. I agree, I think that we will have multiple states we will have a more mature market and the key thing for me is we’d have learned… no one really understands the American better yet And I think once we do that Both operators and affiliates would be a much better position to actually drive the market forward in a responsible fashion You know definitely a U.S facing brand has got to be has got to be up there, obviously access to the sports betting licenses the technology the operational excellence goes without saying and incidentally the innovation that’s going to come out of that going forward as well because when we talk to investors in some of the round tables we do, the number one question is always about what is going to be different in the States that we’re not saying over here in the UK Europe Where’s the next best thing? When’s Silicon Valley, for example going to come, you know going to play its card. Access to database and customers and the ability to transfer predominantly a gaming led country into sports, although it is a sports-mad country and Probably, yeah, years as Anton says, that that cultural mix as well so if you’ve got a power a power base between the the partnership that you’re dealing with that is equally shares those things, then I think you’re sort of got a good recipe there.

But if there is a difference then that’s when an M&A might get into trouble I think the most important factor when you’re you know if you’re European-based looking to get in to U.S is to have some It is to have control over your tech when it comes to Sportsbook. So if you’re not a Sportsbook-led operator, then it’s very difficult to see your immediate path into that into that market, because all of the gaming thoughts in the U.S. from parties who are looking to do something is suddenly all around Sportsbook In my view, there are other opportunities out there, you know lotteries are are going online and Casino in many states will inevitably follow on from from from Sportsbook. But because they’ll be examples like New Jersey where operators and more importantly, the State, is getting taxes from both verticals and it would seem a natural add-on.

So that that will come further down the line, But you know, if you’re not Sportsbook-led or don’t have that Sportsbook tech then your yes. Your routine is is very difficult. Well, I think it looked very different in five years to the way it looks at the next two to three years I suspect that, given JV’s generally fail, lots will fail. I would suspect that given unholy partnerships between competing interests generally fail plenty will fail and I suspect that the biggest player may not even exist yet.

So, much like we saw here, I would imagine there will be innovation, there will be some freedom around technology in the very very long term I suspect the person with the best product… the company the best product will win and I think that’s very complex as to what the best part looks like, but we’re just we just faced with so many unknowns My view if I give you a golf analogy I think, product allows you to make the cut. And I think that your excellence in operations and execution and delivering value to your customer allows you to win. I think that’s who’s gonna win I would say it’s simple. Scale matters. Who is going to have the most access to the most states can build the scalability both around investment in R&D both investment in marketing and that ultimately will be the winner.

What we are all doing right now, we are betting on outcome of this Sportsbook frenzy. We don’t know how many states at the end will regulate. We don’t know what will be the taxation in these states.

There are a bunch of deals being made in complicated waterfall structures. And it’s all basically a bet for a long-term success. And I agree with my colleagues, you cannot predict.

But ultimately Who is able to scale, that that’s the person that is going to won. Very exciting We’re looking forward to all the opportunities that are coming out of this the growth of the market is going to be huge It’s going to lead to a future development that I think Will be best for betters and best for the the industry as a whole. It’s very exciting I mean I used to say I’ve been doing this since 1995 and I used to say this will never happen in my lifetime and I Have to change my mind because obviously it’s happening So it is pretty exciting and it was just really being able to flip a switch with the Supreme Court decision And and also I think we have to give kudos to the state of New Jersey for pushing that issue To the extent that they did because it had they not pushed it we wouldn’t be where we’re at now