UK sports betting firms gamble on US after sports betting wager judgment

5 June 2018
bet9ja.com
By Natalie Sherman

Business reporter, New york city

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

From Tuesday, new guidelines on wagering 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 allow sports betting wagering.

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

For UK firms, which are grappling with debt consolidation, increased online competition and harder guidelines from UK regulators, the timing is especially appropriate.
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But the industry states counting on the US remains a risky bet, as UK business deal with complex state-by-state regulation and competitors from established regional interests.

"It's something that we're actually focusing on, however equally we do not want to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently acquired the US dream sports betting website FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video 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 decision, which struck down a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.

The ruling 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 legislators.

That is anticipated to result in substantial variation in how companies get accredited, where sports betting can take place, and which occasions are open to speculation - with huge ramifications for the size of the market.

Potential earnings varieties from $4.2 bn to nearly $20bn each year depending on elements like the number of states transfer 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 big'", said Will Hawkley, London-based head of leisure for experts KPMG.

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

'Remains to be seen"

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

But bookies deal with a far various landscape in America than they do in the UK, where sports betting shops are a regular sight.

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

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

States have also been slow to legalise many types of online gaming, in spite of a 2011 Justice Department opinion that appeared to get rid of obstacles.

While sports betting wagering is usually seen in its own classification, "it plainly remains to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting 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 prison time.

Now a specialist, he states UK firms must approach the market thoroughly, picking partners with caution and preventing mistakes that might lead to regulator reaction.

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

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which desire to collect a portion of earnings as an "stability cost".

International companies face the included challenge of a powerful existing gaming industry, with casino operators, state-run lotteries and Native American people that are seeking to defend their turf.

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

They point to SBTech's current statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the kind of deals likely to materialise.

"It will be a win-win for everybody, but it will be collaborations and it will be driven by technology," Mr Hawkley said.
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'It will just depend'
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Joe Asher, primary executive at William Hill US, is clear-eyed about the truths.

The business has actually been buying the US market because 2011, when it purchased three US firms to develop a presence in Nevada.

William Hill now uses about 450 individuals in the US and has revealed partnerships with gambling establishments in Iowa and New Jersey.

It works as threat supervisor for the Delaware Lottery and has actually invested millions alongside a regional 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 necessarily the goal everywhere.

"We definitely mean to have a very significant brand 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 most significant market on the planet," he included. "Obviously that's not going to happen on the first day."

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