Why sports gaming M&A is about to take off
Sports betting is rapidly gaining traction in the U.S., and that is spurring mid-market deals. Scientific Games Corp. (Nasdaq: SGMS) is buying sports betting data provider Don Best Sports Corp. The deal comes on the heels of the U.S. Supreme Court’s overturning a 1992 federal law that barred most states from authorizing sports betting. The decision could pave the way for states to allow sports gambling.
“As sports betting rapidly gains popularity in the U.S., we’re ready to help our customers capitalize on the new U.S. market while solidifying our long-held leading global position,” says Scientific Games CEO Barry Cottle. Scientific Games makes mobile games, instant lottery games, slot machines and electronic table games. Don Best offers betting lines and other stats to more than 100 sportsbooks.
Casino operator Boyd Gaming Corp. (NYSE: BYD) and fantasy sports company FanDuel Group are forming a strategic partnership in which the two companies will leverage each other’s brands and technology to pursue online gaming across the U.S.
Under the partnership agreement, Boyd will expand into online sports betting using FanDuel’s technology, while FanDuel will establish an online sports gaming presence in states where Boyd is licensed.
“Through this partnership, Boyd Gaming and FanDuel Group will be in an excellent position to successfully capitalize as sports betting and online gaming expand across the country,” says Boyd CEO Keith Smith. “By joining forces with FanDuel’s nationally-known brand, as well as their considerable technical expertise and resources, we will be positioned to build market-leading sports-betting and online gaming operations in each state as they move forward with these new forms of entertainment.” Sports betting and gaming provider Paddy Power Betfair has recently acquired a 61 percent stake in FanDuel.
In 2018, Betfair reached a tentative agreement to offer sports betting products at the Meadowland Racetrack in New Jersey and at Tioga Downs in New York, with the latter pending legislative and regulatory approval.
“Meadowlands Racetrack has the potential to be among the best, if not the best, sports betting venues in the US.,” says Befair US CEO Kip Levin. “Combining these premier facilities with the global sports betting prowess of Paddy Power Betfair is a great match and will enable us to bring an unparalleled sports betting experience to customers in the northeast.”
DraftKings, a rival of FanDuel’s, became the first company to roll out mobile sports betting in New Jersey with a soft-launch of a new app.