UK betting firms bet on US after sports betting wager ruling
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5 June 2018

By Natalie Sherman

Business reporter, New york city

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

From Tuesday, brand-new guidelines on betting entered into effect in Delaware, a tiny 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 very first in what might become a wave of legalisation after the Supreme Court last month cleared the way for states to enable sports betting wagering.

The industry sees a "as soon as in a generation" opportunity to develop 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 coming to grips with debt consolidation, increased online competition and tougher rules from UK regulators, the timing is particularly opportune.
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But the industry states counting on the US remains a dangerous bet, as UK companies face complicated state-by-state guideline and competition from established local interests.

"It's something that we're truly concentrating on, however equally we don't desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently bought the US fantasy sports betting site FanDuel.

'Take time'

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

Firms are wanting to use more of that activity after last month's choice, which overruled a 1992 federal law that states beyond Nevada and a couple of others from authorising sports betting.

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 local lawmakers.

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

Potential revenue varieties from $4.2 bn to almost $20bn yearly depending upon elements like how many states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I think the majority of 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 some time'."

'Remains to be seen"

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

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

US laws minimal gaming largely to Native American lands and Nevada's Las Vegas strip until reasonably just recently.

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

States have likewise been sluggish to legalise numerous kinds of online gambling, despite a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting is typically viewed in its own classification, "it plainly stays to be seen whether it gets the sort of momentum individuals think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

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

Now a consultant, he states UK firms need to approach the marketplace thoroughly, choosing partners with care and preventing bad moves that might cause regulator reaction.

"This is an opportunity for the American sports betting gambler ... I'm not exactly sure whether it is an opportunity for service," he states. "It really depends on the result of [state] legislation and how the company operators pursue the opportunity."

'It will be collaborations'

As legalisation begins, sports betting firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which desire to collect a portion of income as an "integrity fee".

International companies deal with the added challenge of an effective existing video gaming market, with gambling establishment operators, state-run lottos and Native American tribes that are seeking to protect their turf.

Analysts say UK firms will need to strike partnerships, using their expertise and innovation in order to make inroads.

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

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

'It will simply depend'

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

The company has been purchasing the US market given that 2011, when it purchased three US firms to develop an existence in Nevada.

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

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

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

"We certainly mean to have a very significant brand name existence in New Jersey," he stated. "In other states, it will just depend upon policy and potentially who our local partner is."

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

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