Ladbrokes makes move into U.S. gaming market
1 Feb 2012
By Chris Sieroty
By Chris Sieroty
The United Kingdom-based sports book and online casino paid $3 million to acquire 65 percent of Stadium Technology Group, a Las Vegas-based supplier of software and in-game betting applications to sports book operators.
Ladbrokes also has an option to buy the remaining 35 percent of the company over the next five years on a performance-related basis, the company said in a statement.
"The size of the U.S. market and potential for positive regulatory change in the coming years makes it a sensible place to establish a presence," Ladbrokes CEO Richard Glynn said.
Glynn said Stadium Technology has the potential to expand its business by being one of the key software suppliers to casinos in Nevada and Delaware.
Stadium Technology provides the software for each of the current Cantor Gaming locations in Las Vegas, along with the Golden Nugget and Treasure Island. Ladbrokes is already a gaming giant, operating more than 2,700 betting shops in Great Britain and Europe.
Ladbrokes is the second British bookmaker to make a multimillion-dollar bet on sports in Las Vegas. William Hill PLC spent more than $53 million last year to buy American Wagering Inc., Brandywine Bookmaking LLC and Club Cal Neva Satellite Race and Sports Book division in Northern Nevada.
William Hill, which operates some 2,350 betting shops in the United Kingdom, gained a software division with its purchase of American Wagering. The parent company of Leroy's operates a division called Computerized Bookmaking Systems.
"These kinds of transactions are primarily done because they believe the market is going to grow," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
Sports betting generated gross revenues of $151.1 million in 2010, which was only 5.5 percent of the $2.7 billion wagered on college and professional sports in Nevada.
"It's not a big business, but they look at the potential, especially with what (Raymond) Lesniak is doing in New Jersey," Schwartz said.
Lesniak, a Democratic state senator, has been introducing bills and lobbying for online gaming in New Jersey and to allow sports betting at the state's 11 casinos and four racetracks to help fend off increased competition from neighboring states.
New Jersey Gov. Chris Christie recently signed a measure that would legalize sports betting in New Jersey. The state now has two options: Ask a judge to toss out the federal law or wait for Congress to overturn the ban on sports wagering.
In an attempt to avoid a court fight, U.S. Rep. Frank Pallone Jr., D-N.J., has introduced federal legislation that would open sports betting to New Jersey by excluding New Jersey from the federal Professional and Amateur Sports Protection Act of 1992.
Schwartz said that if New Jersey succeeds, there will "be a lot of other states coming in."
"What (Ladbrokes and William Hill) are doing is acquiring the infrastructure, which will put them in the catbird seat when it's legalized in other states," Schwartz said.
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