Bookies shares stay hot after US sports betting win but the payoff will be long in coming

There wasn’t much sign of a hangover this morning after the party that started in the UK gambling sector in the wake of the decision by the US Supreme Court to allow states to legalise sports betting.

Some £1.5bn was added to the sector’s value at the stroke of the Justices’ pen, and it largely held on to that as the shares started trading.

Whether that continues over the weeks and months to come remains to be seen.

The ruling has clearly opened up a huge opportunity. Americans love to bet on sports. Lots of them find ways to do so despite the restrictions currently placed on it. Legalised, it’s the mother lode. The mere thought used to get gambling execs more excited than watching a Grand National favourite falling at the final fence.

But do they have the smarts to fully capitalise on it? That's the big question.

Ask gambling industry types about the quality of its managers and they’ll often sigh and shake their heads. Perhaps that’s not entirely fair. Breon Corcoran at Paddy Power Betfair pulled off a transformative deal, but he's left. Kenny Alexander turned a little known Isle of Man based internet outfit into the owner of Ladbrokes. So there;s that.

Elsewhere? Well...

An example of the sector’s sometimes less than sharp thinking can be seen in the reports of a letter from William Hill chairman Roger Devlin to Theresa May, fretting about an unwelcome foreign takeover if her Government cuts the maximum fixed odds betting terminal stake to £2, a possibility that has kept the suddenly sprightly shares under a cloud for months.

While the questions raised about jobs in the same missive might have found some sympathy, it looks ill judged at best. An overseas outfit gobbling up an underperforming William Hill would hardly be of great concern to a government during sane and stable times, let alone in the current climate.

Winning a gamble on this new playing field will need to likes of Mr Devlin to show improved form.

New Jersey’s attempt to offer licences had been knocked back at every level before reaching the Supreme Court, which ruled a 1992 law prohibiting states (other than Nevada) from licensing sports gambling as unconstitutional.

The four big leagues (the NFL, NBA, Major League Baseball and the fourth place National Hockey League) have different levels of comfort with the activity, with the more progressive NBA the most favourably inclined.

They’d all now like some form of Federal structure over the 23 states that could now take the plunge because that would make it a lot easier for them to monetise their piece of the pie. Other interests have different ideas. There’s a lot of politicking to be done between here and a payday.

Shore Capital had the right of it when it suggested that it will be some time before the bookies and their excitable shareholders see much in the way of profits. Unless they succumb to the sort of bid Mr Devlin fears, and there will be a lot of eyes now cast in direction of Hills on that front. He’s right there.

The biggest immediate winners by far will be the lobbyists and the Last Vegas based compliance consultants, both of which will be spending them next few weeks wandering around boardrooms making glossy presentations.

So how much are you going to cost us, says the CEO, having heard the latest pitch. Just make the cheque blank when you hand it over buddy.

If only we could bet on them.