UK sports 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 firms as sports betting wagering starts to spread in America.

From Tuesday, new guidelines on sports betting came into result in Delaware, a tiny east coast state about 2 hours from Washington.

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

The modifications 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 permit sports betting wagering.

The industry sees a "when in a generation" opportunity to establish a brand-new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who heads leisure research at Davy.

For UK companies, which are grappling with combination, increased online competitors and tougher guidelines from UK regulators, the timing is especially opportune.

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But the industry says relying on the US remains a dangerous bet, as UK business deal with complicated state-by-state policy and competition from established regional interests.

"It's something that we're actually concentrating on, however equally we do not wish to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which just recently bought the US dream sports betting website FanDuel.

'Require time'

The US for about 23% of the world's $244bn (₤ 182bn) in video gaming income last year, 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 overruled a 1992 federal law that disallowed states beyond Nevada and a few others from authorising sports betting wagering.

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

Potential income ranges from $4.2 bn to practically $20bn each year depending on factors like how lots 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 big'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he said: "I believe 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, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some form by 2023, producing a market with about $6bn in annual profits.

But bookmakers face a far various landscape in America than they do in the UK, where wagering shops are a regular sight.
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US laws minimal gambling mostly to Native American lands and Nevada's Las Vegas strip until relatively just recently.

In the popular imagination, sports betting wagering has actually 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 gaming, despite a 2011 Justice Department opinion that appeared to eliminate obstacles.

While sports betting is normally seen in its own classification, "it clearly remains to be seen whether it gets the kind of momentum people believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

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 jail time.

Now a specialist, he says UK companies ought to approach the market carefully, picking partners with caution and avoiding missteps that might cause regulator backlash.

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

'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 desire to collect a portion of income as an "integrity cost".

International business face the included obstacle of a powerful existing gaming market, with gambling establishment operators, state-run lotteries and Native American people that are seeking to defend their turf.

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

They indicate SBTech's recent announcement that it is providing 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 partnerships and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

The company has been investing in the US market since 2011, when it purchased 3 US firms to establish an existence in Nevada.

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

It works as danger manager for the Delaware Lottery and has actually invested millions together with a local designer 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 goal all over.

"We certainly intend to have a very considerable brand name presence in New Jersey," he stated. "In other states, it will just depend upon guideline and possibly who our regional partner is."
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"The US is going to be the biggest sports betting wagering market in the world," he added. "Obviously that's not going to happen on day one."

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