It was called the British Invasion.
The first wave was led by invaders with names like the Beatles, Rolling Stones, and Dave Clark Five.
We are experiencing another British invasion, one with a Nordic twist. The first wave was led by names like William Hill, Paddy Power Betfair, GAN, and 888.
The next wave is arriving now, motivated by the emerging U.S. sports betting market and expectation that it will lead to comparable growth in online and mobile gaming.
The new comers are teeming into the country, applying for gaming licenses, attending conferences, trying to understand the fractured and often fractious American legislative and regulatory systems.
A number of them are companies listed on London and Stockholm stock exchanges, thus open to investment.
And while not well known yet to many American investors, they are likely to be soon, just like William Hill, Paddy Power Betfair and, in the also emerging world of virtual sports, now NASDAQ CM-listed Inspired Entertainment.
An example of this interest in the U.S. and attention gotten on behalf of American investors is Playtech, the London-listed Internet technology company with a £1.3 billion market cap.
American activist investor Jason Ader had warned that Playtech couldn’t enter the U.S. as long as founder Teddy Sagi was a major shareholder, given what he saw as licensing difficulties for the former CEO. Sagi sold his shares. Now, whether Ader was instrumental in Sagi selling out or whether Sagi did so at his discretion, as he claimed, is a moot point. The pertinent point is that a British gaming company caught the attention of a high-profile American investor for the very reason that America is an attractive growth opportunity for Playtech.
Here are a few of the publicly traded newcomers:
- GVC Holdings grew rapidly as an online gaming operator acquiring famous brands and transformed itself last year with the purchase of British bookmaker Ladbrokes Coral Group.
GVC’s entrance to the U.S. comes through a $200 million joint venture with MGM Resorts to create a sports betting and online gaming platform.
GVC has a market cap over £3 billion.
- Kindred. The Stockholm-listed betting company grew revenues last year by 21 percent to £908 million and EBITDA 13 percent to £203 million.
Kindred’s interest in the U.S. is clear as CEO Henrik Tjarnstrom says the country can become the world’s biggest sports betting market.
- Kambi. The Stockholm-listed sports betting technology and platform provider already has a presence in the U.S. serving New Jersey and Mississippi sports books and signing on Greenwood Gaming in Pennsylvania.
Kambi grew revenue last year by 23 percent to €76 million and EBITDA 41 percent to €22.5 million.
- Better Collective is an affiliate, a company that attracts players to sports betting and gaming sites. Also Stockholm listed, the company has its sights on the US.
- Newgioco is a Canadian headquartered and listed company that operates primarily in Italy but is investing $1 million this year to enter the U.S. CEO Michele Ciavarella sees the U.S. as the world’s fasted growing market.
Newgioco grew rapidly last year and has been on an acquisition spree, including the just-announced purchase of what it calls its flagship deal, Fleetwood Gaming, in Montana. Revenue rose 51 percent to $34.335 million and EBITDA 37 percent to $3.515 million.
Of course, these are just a few of the companies entering the U.S.
London-listed Sportech has been in the country for a while, operating OTBs in Connecticut and might get the chance to run full sportsbooks in the Nutmeg State.
Sportradar is a data company that has attracted investment from some significant private capital firms that value it at $2.5 billion. The company has clients that range from sports books to the NFL. It would not be a surprise to see Sportradar go public someday, possibly in the US.
The point here is that a whole new world of equity investing opportunities are opening with the proliferation of sports betting and online gaming in the United States.
