The value of London-listed gambling firms, including 888, Paddy Power Betfair and William Hill, surged by more than £1.5bn after the US supreme court struck down a nationwide ban on sports betting that has stood for 26 years.
The court upheld a legal challenge by the state of New Jersey, which argued that the Professional and Amateur Sport Protection Act of 1992 (PASPA) was unconstitutional.
Sports gambling set to become legal across US after supreme court decision
The ruling, by seven votes to two, starts a race among British bookmakers and online gambling companies to win customers in the lucrative US market, with individual states now expected to draw up laws to allow sports betting.
Shares in online gambling firm 888, which operates a poker network in three US states, surged by more than any other company, gaining 15%.
The chief executive, Itai Frieberger, said the firm was “uniquely positioned to exploit the potential growth opportunities in the US market that today’s ruling opens up”.
Paddy Power Betfair and William Hill – both of which have built sizeable footholds in the US in readiness for the repeal of PASPA – enjoyed gains of 12.2% and 10.7% respectively.
GVC, which sealed a £4bn merger with Ladbrokes earlier this year but has less of a presence in the US, rose by a more modest 7.6%, while the gambling software company Playtech was up by 3%.
The combined share prices inflated the value of London-listed gambling firms by more than £1.5bn.
Traditional high street bookmakers such as William Hill have recovered most or all of the losses seen on the back of reports that the maximum stake on fixed-odds betting terminals will be cut to £2. A decision on FOBTs, which account for more than half of UK bookmakers’ revenues, is expected this week.
The William Hill chief executive, Philip Bowcock, said: “This is a landmark moment for sports betting and for William Hill. Now, all attention shifts to the States, where steps have already been taken to prepare for this day. Legalised sports betting means that consumers and sports leagues will have greater protection, states will benefit from the raising of taxes and there is the potential for over 100,000 jobs to be created.
“We welcome the ruling and expect to be operational in New Jersey as soon as responsibly possible. We are also actively working on opportunities in a number of other states and will update on these opportunities as appropriate.”
Geoff Freeman, the president of the American Gaming Association (AGA), said: “Today’s decision is a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner.”
The AGA has argued that the law against sports betting has given rise to a huge illegal gambling industry that accepts $150bn (£110bn) in wagers a year, much of it run by organised crime gangs such as the mafia.
In its ruling, the supreme court said: “Supporters argue that legalisation will produce revenue for the states and critically weaken illegal sports betting operations, which are often run by organised crime.
“Opponents contend that legalising sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.”
However, it said it was not the supreme court’s decision to make a “policy choice”, only to decide whether PASPA was in keeping with the constitution.
Gambling industry analysts said the scale of the opportunity for gambling companies would depend on how tightly individual states decide to regulate the industry.
Some states are expected to restrict sports betting to land-based casinos or racetracks, rather than permitting online bets, while others have proposed tax rates that industry figures say are unworkable.
Analysts at the stockbroker Goodbody said: “It could take a number of years before we see wide-scale US sports betting and significant investment may be required to develop a meaningful business in the US.”