John DeCree, Director and Head of North America Equity/High Yield Research at Union Gaming, suggests that potential entrants to the nascent US sports betting market should move sooner rather than later to get in on the action. That will be his key message to delegates at this month’s inaugural Betting on Sports America conference during a special panel titled: ‘Follow the money – where are investors seeing value?’
The panel will explore how regulations sweeping across the country are influencing M&A activity and attempt to identify what companies are looking for and, importantly, what do investors believe they should be looking for from sports wagering.
DeCree, who has spent more than a decade in capital markets focusing on the casino and gaming industry, spoke to SBC Americas in advance of Betting on Sports America. He said that the patchwork approach to legislation in the US presents its challenges for investing in the sports betting space given the potential longer-tailed returns.
“Considerations should be given to companies that are well capitalized or have favorable access to capital in order to finance the required growth needed to emerge as a key player in the US,” he advised potential entrants. “Other considerations should be given to companies with unique and identifiable technology or competitive advantage such as market access, user databases, proven ability to navigate new markets and regulatory hurdles, and so on.”
That patchwork approach also poses another challenge, warned DeCree, namely “…creating a scalable and adaptable product offering that is easy to maneuver and adapt to even small changes in regulatory requirements”. He added: “The Wire Act confusion also creates some complexity, though the recent interpretation hasn’t appeared to stymie the progress of the industry.”
Looking ahead to Betting on Sports America, DeCree noted: “The important message is that sports betting in the US is here and now, and investors and companies should be thinking about quickly participating, taking advantage of the opportunity, and getting involved. It’s happening now, and while its important to take a thoughtful approach to investment and diligence, things are moving quickly.”
Union Gaming is a boutique investment bank and advisory firm focused exclusively on the global gaming industry. The company specializes in global equity and high yield research, securities dealing, investment banking, and advisory. Founded in 2009, it has offices in Hong Kong, Las Vegas, Macau, and New York and is focused on all facets of the gaming industry and gaming expansion, including the sports betting opportunity across the US.
Betting on Sports America boasts 175 leading industry speakers across 40 sessions, with 60 exhibitors displaying their latest products on the 61,000 sq ft exhibition floor at the Meadowlands Exposition Center. Delegates will be treated to world class hospitality with plenty of business and networking opportunities in New Jersey (Meadowlands Racetrack) and New York (40/40 Club and Sky Room Rooftop Bar). For more information about the event, please visit the Betting on Sports America website.