Bookmaker News – Bookmakers Shares Tumble

Bookmakers shares nose-dive after US u-turn

Bookmaker News

The share price of some of Ireland and the UK’s leading betting companies tumbled this week after the US Department of Justice effectively performed a U-turn and called for wider restrictions on all gambling on the internet.

The stock value of the likes of Paddy Power Betfair, William Hill and 888 Holdings fell as much as seven per cent after the US regulator reversed its 2011 ruling that made only sports betting online illegal under the Wire Act. In America, the 2011 reading of the 50-year-old  federal law prohibits certain types of gambling in the US, including sports betting and the DoJ now says the provisions under the act must now be considered in tandem with the Unlawful Internet Gambling Enforcement Act.

The new interpretation of the law’s scope will almost certainly be contested in courts up and down the USA but the ruling, made in November but only released days ago, is a huge blow to those betting firms on this side of the Atlantic who have been pouring millions of dollars into what they thought was an emerging US market.

Britain’s bookmakers have been making deals to move into the US market since a Supreme court ruling last May which took the United States a step closer to legal sports betting in a number of states nationwide. Previously, punters had to travel to states like Nevada and places like gambling capital Las Vegas if they wanted to expand their betting options.

William Hill will be feeling particularly aggrieved after signing a 25-year deal with multi-billion-dollar casino chain Eldorado Resorts as recently as September on the back of the legalisation. They have been at the forefront of the betting land-grab that has been taking place and plans were in place to open sportsbooks in five of Eldorado’s 21 properties across three US states. That, however, is now in doubt and there will be some sweaty palms around the table in William Hill’s boardroom right now.

The legal developments will also be concerning 888 Holdings given that the firm recently spent $28million buying out the remaining stake in the All American Poker Network that it didn’t already own. Last year, Paddy Power Betfair agreed to combine its US operations with fantasy sports business FanDuel so has also taken a hit, though the implications of the new DoJ ruling will not really be known until the war between Donald Trump and Congress is decided and the US government shutdown is brought to an end. Only then can any prosecutions on the back of the ruling be considered.

 


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