UK sports betting firms gamble on US after sports betting wager judgment
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

It's high stakes for UK firms 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 two hours from Washington.

Neighbouring New Jersey could start accepting sports betting bets as early as Friday.

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

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

For UK companies, which are facing combination, increased online competitors and harder guidelines from UK regulators, the timing is especially appropriate.

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But the industry says relying on the US stays a dangerous bet, as UK business face complicated state-by-state regulation and competitors from established regional interests.

"It's something that we're actually concentrating on, but equally we do not desire to overhype it," said James Midmer, representative at Paddy Power Betfair, which just recently purchased the US fantasy sports betting site FanDuel.

'Take some time'

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

Firms are wanting to take advantage of more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states beyond 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 in fact legalise sports betting, leaving that concern to regional lawmakers.
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That is expected to lead to significant variation in how companies get licensed, where sports betting wagering can happen, and which occasions are open to speculation - with big implications for the size of the market.

Potential earnings varieties from $4.2 bn to practically $20bn annually depending upon aspects like the number of states transfer 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 substantial'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I believe many people ... are taking a look at this as, 'it's an opportunity but it's not going to be $20bn and it's going to be state by state and it's going to take time'."

to be seen"

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

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

US laws limited gambling mostly to Native American lands and Nevada's Las Vegas strip till 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 likewise been slow to legalise lots of types of online gambling, despite a 2011 Justice Department viewpoint that appeared to eliminate challenges.

While sports betting wagering is typically seen in its own category, "it clearly remains to be seen whether it gets the sort of momentum people believe it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.

David Carruthers is the former president of BetonSports, who was apprehended in the US in 2006 for running an offshore online sportsbook and served jail time.

Now a consultant, he states UK firms must approach the market carefully, picking partners with care and avoiding mistakes that could result in regulator reaction.

"This is an opportunity for the American sports betting wagerer ... I'm unsure whether it is a chance for business," he states. "It really depends on the result of [state] legislation and how the service operators pursue the opportunity."

'It will be collaborations'

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

International companies face the added obstacle of a powerful existing video gaming industry, with gambling establishment operators, state-run lotteries and Native American people that are seeking to protect their grass.

Analysts say UK companies will need to strike collaborations, using their knowledge and technology in order to make inroads.

They indicate SBTech's current announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers likely to materialise.
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"It will be a win-win for everybody, however it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

The company has been buying the US market since 2011, when it acquired 3 US companies to develop an existence in Nevada.

William Hill now employs about 450 individuals in the US and has announced partnerships with casinos in Iowa and New Jersey.

It works as risk manager for the Delaware Lottery and has invested millions along with a local designer in a New Jersey horse racing track.

Mr Asher stated William Hill has ended up being a home name in Nevada but that's not always the goal all over.

"We definitely mean to have a really significant brand presence in New Jersey," he said. "In other states, it will simply depend upon policy and possibly who our regional partner is."

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

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