Telecoms company Verizon has said it, too, could be a new force in US betting markets, calling into question what role the gambling sector could end up playing should the leviathans of Silicon Valley decide to follow suit.
The New York-based phone company, with its 100 million subscribers, would make a formidable contender for US betting revenues.
Having acquired Yahoo for $4.5bn in June last year, Verizon has gained another 1.3 billion users, as well Yahoo’s fantasy sports unit, on which sports fans spend an estimated 30 billion minutes a year managing teams.
Such numbers, common in tech, dwarf those in the gaming sector. But analysts suggest competition from big business could present more opportunity than threat to traditional betting firms.
David McLeish, M&A advisor at Wiggin, said that “the financial firepower and technical expertise” of these companies means that “a new entrant couldn’t be ruled out”.
“However, a proven track record in the industry remains very powerful, particularly in dealing with regulators. This might make M&A activity a more viable entry point into the market.”
Jeremy Kleiman, gaming attorney at Saiber in New Jersey, agreed that the “tech giants like Verizon, Google, Amazon and Facebook will be theoretically well positioned to enter the market based on the sheer size of their customer data bases.”
“But as a practical matter, most observers expect online sports betting to be authorised in a similar way to online casino in states like New Jersey and Pennsylvania. That is to say, land-based casinos will likely hold the sports betting licences, existing online operators and suppliers that already have relationships with the land- based licensees (via online casino), and who also have the technology, will be better positioned to capitalise.”
Verizon is probably best positioned to try and enter the market, he added, given its vast database of sports fans via its fantasy sports product.
“It’s best approach would be to form a B2B partner with a European sports betting operator who has the technical expertise to run an online sports book,” said Kleiman.
“The partnership would then approach land-based casinos and offer to be their online sports betting provider.”