Multinational companies lining up to cash in big if American gambling sports landscape opens

The state of New Jersey is on one side, planning to accept legal sports bets at its casinos and horse tracks in 2013, a violation of federal law. On the other is a consortium of sports organizations, the NFL and NCAA chief among them, which opposes all sports wagering and have filed suit to stop it.

Hovering on the outside is the gambling industry, including international bookmakers who are quickly positioning themselves if New Jersey wins and a gold rush of action begins in the United States.

"The U.S. is obviously a major, major market," said Joe Asher, president of William Hill US, a division of Britain's largest bookmaker which this summer completed the licensing on a $55 million purchase of three American sports wagering companies. "If it opens and becomes legal, there will be a number of people looking to expand in the Unites States. The companies already active in the U.S. will have an advantage."

This is the battle in the background of the battle.

The frontline is an expected lengthy fight that could find its way to the U.S. Supreme Court. Each side is currently strengthening its legal teams. Waiting for the result are huge multinationals dreaming of an America where, like in much of Europe, sports wagering stations are as common as state lotteries.

If New Jersey wins its battle to legalize sports betting, the expectation is other states, eager to tap into tax revenue from an industry that currently flourishes through organized crime or offshore online sites, will quickly follow.

Widespread legalization would dramatically change how sports are consumed in America like perhaps no other development. Among the chief speculators is William Hill PLC, which in June completed the purchase and licensing of three United States gambling companies that operate in Nevada and Delaware, where the state allows NFL parlays.

"I think the acquisitions in Nevada made business sense in and of themselves," said Asher, a Delaware native who has built a career in sports wagering and sold his Brandywine LLC to William Hill. "Then it leaves William Hill well positioned to pursue other opportunities in the U.S. if they arrive."

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New Jersey passed legislation earlier this year allowing single-game sports wagering at its Atlantic City casinos and four horse tracks across the state. It pointedly defied the federal 1992 Professional and Amateur Sports Protection Act, which limits sports betting to just four states, of which only Nevada is fully active. Not even sovereign Native American casinos are allowed to operate sports books.

"If someone wants to stop us then let them try to stop us," New Jersey Gov. Chris Christie, himself a former federal prosecutor, said in May. While the U.S. Justice Department has remained silent on the issue, the leagues have already stepped up and filed a federal lawsuit in advance of New Jersey's plan to begin issuing licenses in January 2013.

New Jersey recently retained high-profile attorney Ted Olson, the former solicitor general under President George W. Bush, to aid the state's attorney general in building the case. Meanwhile the leagues hired Paul D. Clement, Olson's successor under President Bush, to argue for its side.

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Gov. Christie has expressed confidence that the 20-year old law can be defeated, especially in an era when the public's views on gambling have softened dramatically. In the meantime he's taken repeated cracks at the leagues' confused opposition. Not only have the popularity of the NFL and the NCAA basketball tournament been greatly aided by generations of wagering, the best defense against point shaving and game-fixing, legitimate concerns, are the openness of a regulated and legal industry, where unusual moves in the line or other trends can be reported to authorities.

Besides, illegal gambling has long been known to fund organized crime.

For William Hill, the legal battle is something to monitor while preparing for the results. This, the gaming industry believes, finally could be the moment a tidal wave is unleashed.

Legal sports wagering in Nevada reached $2.9 billion in 2011, but the National Gambling Impact Study Commission believes as much as $380 billion is bet illegally in the U.S. Even if that figure is overblown, there's still a significant amount on the table. William Hill PLC handled $29.1 billion in action in 2011, mostly in Great Britain, and made nearly $300 million in operational profits according to its publicly filed financial records. The U.S. population of about 310 million is around five times that of Great Britain.

In Great Britain, the company operates thousands of small betting parlors, most dotting city blocks like newsstands or coffee shops. In the heated market it is but one of a number of successful operations, including fellow heavyweights Coral and Ladbrokes. The idea that Americans could one day place a sport's bet as easily as buying a lottery ticket at a convenience store is tantalizing for the industry. Meanwhile, bringing the major sports book experience to local casinos is appealing to even occasional gamblers.

"Sports betting is widespread throughout the United States today and 99 percent of it is illegal, unregulated and run by criminals," Asher said.

"There has been illegal bookmaking going on longer than any of us have been alive."

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Asher isn't predicting what will happen in New Jersey, although he's certain that sports betting will eventually be legalized.

"There's no doubt at all that sports wagering will be legal across the U.S. at some point," Asher continued. "The only question is what date it happens and how it happens."

One of William Hill's investments was the purchasing of Brandywine, which in addition to operating 16 sports books in Nevada under the Lucky's banner, is the risk manager for the state of Delaware's NFL parlay business. That expanded this year from the state's three horse track casinos to 31 locations, including bars and stores. William Hill expects it to grow considerably for the 2013 season as it installs more machines to take bets. It's seen as just the start in an industry with seemingly limitless potential.

"We look forward to working with our new colleagues to grow a leadership position in the Nevada sports betting industry and beyond," Ralph Topping, William Hill CEO said in June when the company was licensed in Nevada.

It's "beyond" where the bounty is.

Which is why both sides are bringing in the most powerful attorneys money can buy. And billion dollar multinationals are positioning themselves in the United States to be ready the moment the bets begin.

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