UK Betting Firms Gamble On US After Sports Wager Ruling

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UK sports betting firms bet on US after sports betting wager ruling


5 June 2018


By Natalie Sherman


Business reporter, New York


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


From Tuesday, brand-new rules on wagering entered into impact in Delaware, a small east coast state about two hours from Washington.


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


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


The industry sees a "when in a generation" chance to develop a brand-new market in sports betting-mad America, stated Dublin-based financial analyst David Jennings, who heads leisure research study at Davy.
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For UK companies, which are coming to grips with combination, increased online competition and harder guidelines from UK regulators, the timing is especially appropriate.


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But the market says counting on the US remains a risky bet, as UK business deal with complex state-by-state regulation and competition from entrenched regional interests.


"It's something that we're actually focusing on, however similarly we don't wish to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which recently bought the US fantasy sports betting website FanDuel.


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


Firms are hoping to take advantage of more of that activity after last month's choice, which overruled a 1992 federal law that barred states beyond Nevada and a few others from authorising sports betting.


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


That is anticipated to result in considerable variation in how firms get accredited, where sports betting wagering can occur, and which events are open to speculation - with big implications for the size of the market.


Potential profits ranges from $4.2 bn to practically $20bn each year depending on aspects like how many states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.


"There was a great deal of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for experts KPMG.


Now, he stated: "I think many people ... are looking 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 require time'."


'Remains to be seen"


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


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


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


In the popular creativity, sports betting has actually long been linked to a 1919 baseball World Series match-fixing scandal.
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States have actually also been sluggish to legalise many kinds of online gambling, regardless of a 2011 Justice Department opinion that appeared to get rid of challenges.


While sports betting is normally seen in its own category, "it clearly remains to be seen whether it gets the type of momentum individuals 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 former primary executive of BetonSports, who was apprehended in the US in 2006 for running an offshore online sportsbook and served prison time.


Now a specialist, he says UK companies need to approach the market thoroughly, choosing partners with care and preventing bad moves that could cause regulator reaction.


"This is a chance for the American sports betting ... I'm uncertain whether it is an opportunity for organization," he says. "It actually depends on the result of [state] legislation and how business operators pursue the chance."


'It will be partnerships'


As legalisation starts, sports betting companies are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which wish to collect a percentage of profits as an "stability cost".


International companies deal with the included difficulty of an effective existing gaming market, with casino operators, state-run lottos and Native American tribes that are looking for to safeguard their grass.


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


They indicate SBTech's recent statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers likely to materialise.


"It will be a win-win for everybody, however it will be collaborations and it will be driven by technology," Mr Hawkley stated.


'It will just depend'
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Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.


The business has actually been buying the US market given that 2011, when it acquired 3 US firms to develop an existence in Nevada.
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William Hill now uses about 450 people in the US and has revealed partnerships with gambling establishments in Iowa and New Jersey.


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


Mr Asher said William Hill has actually ended up being a family name in Nevada but that's not always the goal everywhere.


"We certainly mean to have a very substantial brand name existence in New Jersey," he stated. "In other states, it will simply depend on guideline and potentially who our local partner is."


"The US is going to be the biggest sports betting wagering market worldwide," he added. "Obviously that's not going to take place on the first day."


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