UK sports betting firms gamble on US after sports betting wager ruling
bit.ly
5 June 2018

By Natalie Sherman

Business reporter, New York

It's high stakes for UK companies as sports betting wagering starts to spread in America.
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From Tuesday, new rules on wagering entered into result in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey might begin accepting sports betting bets as early as Friday.

The modifications are the very first in what could end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.

The industry sees a "as soon as in a generation" opportunity to develop a brand-new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research study at Davy.

For UK companies, which are coming to grips with combination, increased online competition and tougher guidelines from UK regulators, the timing is particularly appropriate.

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But the market states counting on the US stays a risky bet, as UK companies deal with complicated state-by-state regulation and competitors from entrenched regional interests.

"It's something that we're actually concentrating on, but similarly we do not wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently purchased the US site FanDuel.

'Take time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming profits last year, according to a report by Technavio, external released in January.

Firms are hoping to use more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting wagering.

The judgment found the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that question to local legislators.

That is expected to result in considerable variation in how companies get certified, where sports betting can take place, and which events are open to speculation - with huge implications for the size of the marketplace.

Potential profits ranges from $4.2 bn to practically $20bn each year depending upon factors like how many states move to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.
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"There was a lot of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I think the majority of people ... are looking at this as, 'it's a chance but it's not going to be $20bn and it's going to be state by state and it's going to take some time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in annual profits.

But bookies face a far various landscape in America than they carry out in the UK, where sports betting stores are a regular sight.

US laws minimal sports betting mainly to Native American lands and Nevada's Las Vegas strip until relatively just recently.

In the popular creativity, sports betting wagering has long been linked to a 1919 baseball World Series match-fixing scandal.

States have actually also been slow to legalise lots of kinds of online gaming, in spite of a 2011 Justice Department opinion that appeared to remove obstacles.

While sports betting wagering is normally viewed in its own classification, "it clearly stays to be seen whether it gets the kind of momentum people believe it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting guideline.

David Carruthers is the previous president of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a consultant, he says UK companies must approach the market carefully, selecting partners with caution and preventing missteps that might cause regulator backlash.
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"This is a chance for the American sports betting wagerer ... I'm not exactly sure whether it is an opportunity for service," he says. "It truly depends on the result of [state] legislation and how business operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting companies are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which wish to gather a percentage of profits as an "stability charge".

International business deal with the added obstacle of an effective existing video gaming industry, with casino operators, state-run lotteries and Native American people that are seeking to safeguard their turf.

Analysts state UK firms will need to strike collaborations, offering their competence and technology in order to make inroads.

They indicate SBTech's current announcement that it is providing innovation for Kentucky Derby operator Churchill Downs as an example of the type of deals most likely to materialise.

"It will be a win-win for everyone, but it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.

The business has actually been investing in the US market given that 2011, when it acquired 3 US firms to develop a presence in Nevada.

William Hill now utilizes about 450 people in the US and has actually announced collaborations with gambling establishments in Iowa and New Jersey.

It works as danger supervisor for the Delaware Lottery and has invested millions together with a regional designer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a household name in Nevada but that's not always the objective everywhere.

"We certainly mean to have an extremely considerable brand name presence in New Jersey," he stated. "In other states, it will simply depend on guideline and possibly who our regional partner is."

"The US is going to be the most significant sports betting market on the planet," he included. "Obviously that's not going to occur on day one."

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