UK betting firm Genius Sports seals $1.5 billion US deal

After a significant period of growth in recent years, the gambling industry is now worth around £15 billion annually, with a growth rate of 8% per year. Of this growth, over one third of this revenue is made up of online gambling activity, in which 60% can be attributed to online casino activity and 40% to sports betting.

The US sports gambling market is a little behind this at $238 million, however, since the Professional and Amateur Sports Protection Act of 1992 was abolished just two years ago, 18 states now have an established sports betting market. This can be considered huge progress considering that until 2018, all forms of sport betting in the US were mainly illegal.

This growth could yet accelerate even more with the recent announcement that UK betting firm, Genius Sports have secured a deal worth $1.5 billion to start trading on the New York Stock Exchange. So who are Genius Sports? And what does this move mean for their future?

Who are Genius Sports?

Genius Sports are a business that purchase data from the likes of sports events and then sell this information to leading betting operators. Established 15 years ago, Sport Genius are considered to be at the forefront of tech innovations and have built a solid reputation around the world, in which they are partnered with over 150 betting companies. Their solutions include live betting products and personalised marketing campaigns, as well as full holistic solutions for betting organisations.

The organisation currently has partnerships with over 500 sports organisations globally, putting them in a powerful position to make global progress. Such partnerships already include the English Premier League, NBA, FIBA and FIFA to name a few.

What does the deal mean for the online betting world?

We’re seeing a flurry of transactions currently around the online sports betting world, in which the deal between Genius Sports and dMY Technology group, a blank-check company, is one of the largest this year. The deal is being described as a special purposed acquisition in which it’s expected to close in the first quarter of 2021. In addition to the deal with dMY Technology Group, it is said that a number of other industry investors will also be acquiring an additional $330 million in Genius Sports.

dMY Technology group went public themselves as of August this year, in which they have currently raised over $240 million from its shares on the New York Stock Exchange. Other major industry deals have recently included the popular online sports operator DraftKing being acquired by SPAC Diamond Acquisition CORP, who have since watched DraftKing’s value exceed $33 billion. The company also offer daily fantasy sports and wagering opportunities and have had a big presence in the European market, now also reaching to the US.

How are US sports betting and gambling laws changing?

The US has long had a complicated history when it comes to gambling laws, in which not only have there been complex federal laws which have been open to a certain amount of interpretations, there are also localised gambling and sports betting regulations that are controlled by each state and can vary greatly. In fact, until recently, many people in the US were under the opinion that online gambling in most states was illegal. However, as of today, these laws are becoming more flexible and consumers are able to get involved with betting online, providing it is restricted to one state where it is legalised.

The main law that has restricted all betting and gambling activity, from 1992 up until 2018, was the Federal Professional and Amateur Sports Protection Act. This law didn’t make sports betting illegal, however it restricted states that didn’t already have gambling regulations in place from making it legal in the future. This act severely restricted the online betting and gambling market, meaning that industry growth in many states was at the time impossible.

However, there seems to have recently been a change in the wind where the Supreme Court recently overturned this law, meaning that states can once again control their own laws and regulations around gambling and sports betting. One law that does still restrict growth is the unlawful Internet Gambling Enforcement Act of 2006 which makes it illegal to operate an online gambling website anywhere in the US. One loophole to this is that there are a number of international operators, including the likes of Bovada and BetOnline that do allow Americans to place wagers on their sites.

Overall, while the gambling laws are still quite strict within the US, there is a lot of positive change at the moment that is allowing the industry to slowly but surely start to make some growth again. The acquisition of Genius Sports is likely to fuel some of this growth as more innovative technology becomes available to betting companies, in addition to creating a more prominent name for the gambling and sports betting industry on the stock exchange.

Learn about football betting for FREE

Join our free email course to learn all about football betting. You will learn theory and techniques to make you a better bettor!

Sign up for free