Exclusive: Ladbrokes acquires US sportsbook supplier
UK bookmaker pays US$3m for 65% stake in sportsbook software business that supplies several of the largest casinos in Nevada and Delaware.
Ladbrokes has followed in the footsteps of rival William Hill and made its first strategic acquisition in the United States at a time when intrastate gaming is looking increasingly likely, eGaming Review can exclusively reveal.
The UK listed bookmaker has invested an initial US$3m in exchange for a 65% majority stake in Stadium Technology Group, a Las Vegas-based supplier of software and in-game betting applications to sportsbook operators, third party suppliers and some of Las Vegas’s biggest land-based casinos. It has a retained option to buy the remaining 35% of the business over the next five years on a performance-related basis.
Stadium supplies its licensed technology to a number of sportsbook and third party suppliers in Nevada and Delaware. Casinos that use its software directly or through third party suppliers include Atlantis, Cosmopolitan, Crystal Palace, Golden Nugget, Hard Rock, M Resort, Palazzo, Treasure Island and The Venetian.
A spokesman for the company told eGR that Ladbrokes’ primary objective in the US is to secure a “regulated, licensed presence” and that Stadium was a business that had proven innovative technology wits competitors.
Despite US online sports betting unlikely to be regulated in the coming years, with only four states including Nevada, Delaware, Oregon and Montana able to offer it, a Ladbrokes spokesman said the potential to expand and to offer new products including in-play made the acquisition an easy decision to make.
“The potential is to expand within the US to new casino customers and in terms of the range of its [Stadium’s] product offering to both existing and new customers.
“More long term it makes sense to have a presence so we can take advantage of opportunities as they arise. In short, it’s a small, low risk investment with opportunities within existing regulation and long term potential should regulation open up for sports betting,” he added.
A Department of Justice announcement in late December last year on the 1961 Wire Act clarifying that its prohibitions relate solely to “sports-related gambling activities in interstate and foreign commerce”, has reignited a number of states’ bids to open some form of intrastate online gambling.
New Jersey Senator Raymond Lesniak has pledged to pass his egaming bill through the state’s legislature and get it signed by Governor Chris Christie within the “first few weeks of the new session” which began last week. The chairman of the state’s Senate Economic Growth Committee said it was not a question of “if New Jersey gets internet wagering, but when. My money’s on soon,” he said.
Yesterday Governor Christie signed a bill into law legalising sports betting in the state, but only after a federal ban, bar the four grandfathered states, is overturned. The bill would legalise betting on professional and collegiate sporting games at the Atlantic City casinos and the state’s four horse tracks.
Richard Glynn (pictured), chief executive of Ladbrokes, said: “The size of the US market and potential for positive regulatory change in the coming years make it a sensible place to establish a presence. Stadium Technology is already one of the key software suppliers to casinos in Nevada and Delaware and it has the potential to expand.”
In mid-April last year William Hill made its first foray into the US market by buying two land-based Nevada sportsbook chains for around US$39m (£23.9m). Hill’s paid around US$18m for American Wagering Inc (AWI), which operates 72 sportsbooks and kiosks under the Leroy’s brand, several in casinos owned by MGM, Wynn, Boyd Gaming and Las Vegas Sands.
The bookmaker also paid US$21m to casino and hotel group the Sierra Development Company for the Cal Neva Sportsbook Division, which runs 31 sportsbooks in the Silver State. William Hill and its senior managers will, prior to closing the transactions, need to be licensed by the Nevada Gaming Commission. This process is still underway.