• H2 estimates for a regulated US sports betting market are conservative, and based on a 8-10 year roll out from when PASPA is first repealed.

• Post repeal, we believe the market will require at least 1-2 years of regulatory change, before then developing in three phases: 1. Phase 1( Yrs 2-4): retail, venue specific first- at existing casinos / racetracks( total US market = c6 States); 2. Phase 2( Yrs 4-6): expansion, and the gradual addition of mobile app betting( total US market = c10 States); 3. Phase 3( Yrs 7-10): the eventual move towards a‘ European style’ retail and online offer- all products, including in-play, with a relatively low tax rate( total US market = c18 States).

• In terms of market size, the‘ optimum’ fully regulated potential US sports betting market across all 50 States- assuming all products, freely available both online and in land-based facilities, with a low tax rate- could generate between $ 14.5- $ 24.5bn of GGR( low- to high-point). However, it is highly unlikely the US would ever get close to this‘ optimum’ market size.

• In reality, the‘ realistic’ market size potential will be substantially lower, as:- Not every State will allow sports betting;- Operational restrictions are likely to be applied to key areas such as stake levels, supply structure etc;- Tax levels and license fees are likely to be higher and therefore, restrictive;- The product mix and types of bet will vary significantly;- Operating channels are likely to differ from State to State.

• The potential US sports betting market size has therefore been estimated under four scenarios: 1. The‘ optimum’ market size( all States)- $ 14.5- $ 24.5bn- illustrative; 2. Phase 3: A‘ realistic’ market size, within 8-10 years of land-based and online sports betting being regulated( total US market

= c18 States)- $ 6.1-7.9bn; 3. Phase 2: Retail sports betting in casinos / racetracks, with mobile betting allowed( total US market = c10 States)- $ 3.1-4.9bn; 4. Phase 1: Retail only sports betting in casinos / racetracks, no mobile( total US market = c6 States)- $ 2.4-3.4bn.

Potential US Regulated Sports Betting Market

Source: H2 Gambling Capital, 2017