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Nektan in 'ideal' position following US betting law change

Published: 12:56 29 May 2018 BST

baseball
Sports and casinos are a good combination

Big changes are afoot in global gambling, especially the US where companies and investors are scrabbling to adjust to the lifting of the off-site sports betting ban.

The scale of the change underway in the US is enormous.

WATCH: Nektan well placed in US market following Supreme Court betting decision

Broker Jefferies estimates the market might be worth US$57bn, while the industry trade body suggests (currently) illegal activity might be three times the size.

Gary Shaw, founder and interim chief executive of AIM-listed interactive gaming specialist Nektan PLC (LON:NKTN) also sees a huge market.

“The current land-based market is worth about US$68bn, but with online that can expand to US$100bn.”

Nektan specialises in online casino software and just a few days after the Supreme Court decision announced a tie-up with mobile sportsbook group Metric Gaming to enter the US market.

Shaw believes it’s a partnership that puts Nektan in an ideal position to take advantage of the US law change.

Nektan’s US subsidiary Respin already has an in-venue casino app (Rapid Games) that is being used by casino operators.

Shaw says it takes about two years to go through the Federal and local compliance/regulatory regimes, which gives it a significant head start over anyone planning the move now.

Sports content

Metric Gaming will use the Rapid platform to supply horse racing and other sports content to betting operators in the US.

If you look at operators in the UK, a combination of sportsbook and casino is also seen as the ideal mobile combination, adds Shaw.

Sportsbook generates between 50-70% of revenues in those cases and casinos the remainder.

Metric and Nektan had been working together on the possibility that the US law would change with the result that ‘very few companies’ are as prepared for the new landscape.

Nektan’s technology has also been proven in Europe through the core business of white label casino games.

The platform, known as Evolve, already hosts over 120 customers in Europe while a lite version is now being rolled out to B2B operators in Asia.

Two of the largest, 138.com and Sun, have already signed up.

Tech essentially the same

The technology is essentially the same as Respin, adds Shaw, who says the timing of US Supreme Court announcement was almost ideal from its point of view.

“We have scaled up Europe and proved the tech is right.

“Asia is where the cash will be and the US will be wonderful opportunity that will dovetail very nicely as it develops.”

That switch of emphasis away from the UK will also help dilute any rise in the point-of-consumption tax on betting, which was indicated in the recent gaming review that also slashed the stake on fixed odd betting terminals to £2 from £100.

Gibraltar-based Nektan is worth £12.3mln at 26p.

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