Sports Betting Offers Processors a Rapidly Growing Opportunity As States Sign on

With 21 states having legalized sports betting in one form or another, major payments processors sense a growing opportunity. The latest development comes from Virginia, where Nuvei Corp. said Wednesday a subsidiary has been granted a sports-betting vendor registration by the Virginia Lottery.

“The company can now offer its innovative payment technology and industry expertise to provide an optimized payment experience and increased revenue opportunities for licensed gaming operators across the state,” Nuvei said in a press release. Virginia represents the fifth state where Montreal-based Nuvei has won approval to process sports bets, following Colorado, Indiana, Tennessee and West Virginia.

Virginia is one of the latest states to approve sports betting, with the legislature okaying it in April and online betting activity starting only in January. Nuvei made clear the state represents an attractive opportunity. “Virginia boasts the 12th-largest population in the United States, offering a lucrative market for sports wagering,” the company said in its announcement.

Online sports betting in particular has grown in popularity in the wake of state restrictions stemming from the Covid-19 pandemic. Eleven states, including Virginia, now offer full-on mobile wagering, with another four allowing a single mobile option, according to gambling-data site ActionNetwork.com. Four more states allow only in-person sports betting, while two more have approved so-called in-person online activity. Another half dozen states are likely to grant approval this year, according to ActionNetwork.

The growing opportunity for payments processors has attracted firms like Worldpay, a unit of FIS Inc., as well as Nuvei, formerly known as Pivotal Payments. Part of the opportunity for processors stems from states’ thirst for revenue. “Budget shortfalls have many states reconsidering sports betting,” ActionNetwork says, thought the site says a handful of states will never permit the business.

Sports betting took off after a 6-3 U.S. Supreme Court ruling in 2018 left the decision to permit the activity up to the states. At the time, only four states, including Nevada, permitted the activity.

In related news Wednesday, the payments network Universal Air Travel Plan Inc., known as UATP, announced Nuvei will process transactions for the company’s more than 30 partner airlines around the world. Washington, D.C.-based UATP said the deal will allow it to offer payment gateway services, local and alternative payments, and acquiring connectivity. “The industry has changed tremendously in the past year, and UATP will continue to seek out the best solutions for airlines,” said Ralph Kaiser, UATP’s president and chief executive, in a statement.