UK Betting Firms Gamble on uS After Sports Wager Ruling

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UK wagering companies bet on US after sports wager ruling

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UK betting firms bet on US after sports betting wager judgment


5 June 2018


By Natalie Sherman


Business press reporter, New York


It's high stakes for UK companies as sports betting starts to spread in America.


From Tuesday, brand-new guidelines on sports betting came into effect in Delaware, a small east coast state about 2 hours from Washington.


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


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


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


For UK firms, which are facing consolidation, increased online competition and tougher guidelines from UK regulators, the timing is especially opportune.


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But the industry states counting on the US remains a dangerous bet, as UK business deal with complicated state-by-state guideline and competitors from established regional interests.


"It's something that we're really focusing on, however similarly we do not want to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which recently bought the US dream sports betting website FanDuel.


'Require time'


The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income in 2015, according to a report by Technavio, external published in January.


Firms are intending to tap into more of that activity after last month's choice, which struck down a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting wagering.


The judgment found the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that concern to regional legislators.


That is anticipated to cause substantial variation in how firms get certified, where sports betting wagering can occur, and which events are open to speculation - with big implications for the size of the marketplace.


Potential income varieties from $4.2 bn to almost $20bn annually depending on aspects like the number of states relocate to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.


"There was a lot of 'this is going to be big'", said Will Hawkley, London-based head of leisure for experts KPMG.


Now, he said: "I believe many people ... are taking a look 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, predicts that 32 states will legalise sports betting in some type by 2023, creating a market with about $6bn in yearly revenue.


But bookies face a far different landscape in America than they do in the UK, where wagering shops are a regular sight.


US laws restricted gambling largely to Native American lands and Nevada's Las Vegas strip until relatively just recently.


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


States have actually also been slow to legalise numerous kinds of online gambling, in spite of a 2011 Justice Department viewpoint that appeared to get rid of barriers.


While sports betting is normally seen in its own category, "it plainly stays to be seen whether it gets the type of momentum individuals believe it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting guideline.


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


Now an expert, he states UK companies should approach the marketplace carefully, picking partners with caution and preventing mistakes that might cause regulator reaction.


"This is an opportunity for the American sports betting bettor ... I'm not sure whether it is an opportunity for service," he says. "It truly is reliant on the outcome of [state] legislation and how business operators pursue the opportunity."

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'It will be partnerships'


As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which wish to collect a portion of income as an "integrity fee".


International companies face the added difficulty of an effective existing video gaming market, with casino operators, state-run lottos and Native American tribes that are seeking to defend their turf.


Analysts state UK firms will require to strike collaborations, offering their expertise and innovation in order to make inroads.


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


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


'It will simply depend'


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


The business has been investing in the US market because 2011, when it bought 3 US companies to establish a presence in Nevada.


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


It works as risk supervisor for the Delaware Lottery and has actually invested millions along with a regional developer in a New Jersey horse racing track.


Mr Asher said William Hill has actually ended up being a household name in Nevada but that's not always the objective all over.


"We certainly plan to have a really significant brand presence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our regional partner is."


"The US is going to be the greatest sports betting market in the world," he included. "Obviously that's not going to happen on day one."


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