UK sports betting firms bet 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 companies as sports betting starts to spread in America.

From Tuesday, new guidelines on wagering entered result in Delaware, a tiny east coast state about two hours from Washington.

Neighbouring New Jersey could start accepting sports betting bets as early as Friday.
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The changes are the very first in what could 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 "when in a generation" opportunity to develop a new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research study at Davy.

For UK firms, which are coming to grips with consolidation, increased online competitors and harder rules from UK regulators, the timing is especially appropriate.

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But the market says depending on the US stays a risky bet, as UK companies deal with complex state-by-state guideline and competition from entrenched regional interests.

"It's something that we're really concentrating on, however similarly we don't want 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 represented about 23% of the world's $244bn (₤ 182bn) in gaming profits last year, according to a report by Technavio, external published in January.

Firms are wanting to use more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states beyond 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 question to regional lawmakers.

That is anticipated to result in substantial variation in how companies get accredited, where sports betting wagering can happen, and which events are open to speculation - with big implications for the size of the marketplace.

Potential earnings ranges from $4.2 bn to nearly $20bn annually depending on elements like how many states relocate to legalise, Oxford Economics estimated in a 2017 research 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 said: "I think many people ... are taking a look 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 require time'."

'Remains to be seen"

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

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

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

In the popular creativity, sports betting has long been linked to a 1919 baseball World Series match-fixing scandal.
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States have also been slow to legalise numerous kinds of online gaming, in spite of a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting is typically seen in its own classification, "it plainly stays to be seen whether it gets the type of 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 overseas online sportsbook and served prison time.

Now a consultant, he states UK companies must approach the marketplace thoroughly, picking partners with caution and avoiding bad moves that could lead to regulator backlash.

"This is a chance for the American sports betting gambler ... I'm not exactly sure whether it is a chance for business," he states. "It actually depends on the outcome of [state] legislation and how the company operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to fend off high tax rates, as well as requests by US sports betting leagues, which desire to collect a portion of profits as an "stability cost".

International business deal with the included challenge of an effective existing gaming industry, with gambling establishment operators, state-run lottos and Native American people that are seeking to defend their turf.

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

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

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

'It will just depend'

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

The business has been investing in the US market because 2011, when it bought 3 US firms to develop an existence in Nevada.

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

It works as threat supervisor 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 actually ended up being a family name in Nevada however that's not always the objective all over.

"We certainly mean to have a very substantial brand name presence in New Jersey," he stated. "In other states, it will simply depend upon guideline and possibly who our regional partner is."

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

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