UK wagering firms bet on US after sports betting wager ruling
bit.ly
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, brand-new guidelines on wagering came into result 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 first in what might 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 develop a brand-new market in sports betting-mad America, stated Dublin-based financial analyst David Jennings, who heads leisure research study at Davy.

For UK firms, which are grappling with consolidation, increased online competitors and tougher rules from UK regulators, the timing is particularly suitable.

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But the industry states counting on the US remains a dangerous bet, as UK companies deal with complicated state-by-state policy and competitors from interests.

"It's something that we're actually concentrating on, but similarly we don't wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.

'Take some time'

The US represented 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 decision, which struck down a 1992 federal law that disallowed states outside of 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 regional legislators.

That is expected to result in considerable variation in how companies get accredited, where sports betting can happen, and which events are open to speculation - with big ramifications for the size of the market.

Potential revenue ranges from $4.2 bn to practically $20bn yearly depending on factors like the number of states relocate 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'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he stated: "I believe 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 take time'."

'Remains to be seen"

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

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

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

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

States have actually also been slow to legalise many forms of online gaming, regardless of a 2011 Justice Department opinion that appeared to eliminate challenges.

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

David Carruthers is the former president of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a specialist, he says UK firms ought to approach the market thoroughly, picking partners with care and avoiding bad moves that might lead to regulator backlash.

"This is a chance for the American sports betting wagerer ... I'm not exactly sure whether it is an opportunity for service," he states. "It actually is dependent on the result of [state] legislation and how business operators pursue the chance."

'It will be partnerships'

As legalisation starts, sports betting wagering firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which desire to gather a portion of profits as an "integrity cost".

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

Analysts state UK firms will require to strike collaborations, offering their know-how and innovation in order to make inroads.

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

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

'It will simply depend'

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

The company has been buying the US market since 2011, when it bought three US companies to develop an existence in Nevada.

William Hill now utilizes about 450 people in the US and has actually announced partnerships with gambling establishments in Iowa and New Jersey.

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

Mr Asher stated William Hill has actually become a household name in Nevada but that's not necessarily the objective all over.

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

"The US is going to be the greatest sports betting market on the planet," he added. "Obviously that's not going to take place on day one."

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