UK sports betting firms gamble on US after sports betting wager judgment
bet9ja.com
5 June 2018

By Natalie Sherman
bet9ja.com
Business press reporter, New York

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

From Tuesday, new rules on came into result in Delaware, a small 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 very first in what could become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting wagering.

The market sees a "once in a generation" chance to develop a brand-new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.

For UK firms, which are coming to grips with consolidation, increased online competition and harder rules from UK regulators, the timing is particularly opportune.

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But the market says depending on the US remains a dangerous bet, as UK business face complicated state-by-state guideline and competition from entrenched regional interests.

"It's something that we're truly focusing on, but equally we don't want to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently bought the US dream sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming revenue in 2015, according to a report by Technavio, external published in January.
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Firms are wanting to use more of that activity after last month's decision, which overruled a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.
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The judgment discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to local lawmakers.

That is anticipated to cause significant variation in how companies get certified, where sports betting can happen, and which occasions are open to speculation - with huge implications for the size of the market.

Potential profits varieties from $4.2 bn to almost $20bn every year depending on factors like how many states relocate 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 specialists KPMG.

Now, he said: "I think many people ... 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 require time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting in some form by 2023, developing a market with about $6bn in yearly revenue.

But bookies face a far various landscape in America than they perform in the UK, where wagering stores are a frequent sight.

US laws restricted gambling mainly to Native American lands and Nevada's Las Vegas strip till fairly recently.

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

States have actually also been sluggish to legalise numerous types of online gambling, regardless of a 2011 Justice Department opinion that appeared to remove barriers.
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While sports betting is typically viewed in its own classification, "it clearly stays to be seen whether it gets the type 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 jail time.

Now an expert, he says UK firms must approach the market thoroughly, picking partners with caution and preventing bad moves that could lead to regulator reaction.

"This is a chance for the American sports betting bettor ... I'm unsure whether it is an opportunity for business," he says. "It truly depends on the result of [state] legislation and how business operators pursue the opportunity."

'It will be collaborations'

As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, as well as demands by US sports betting leagues, which wish to gather a percentage of revenue as an "stability charge".

International companies deal with the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lotteries and Native American tribes that are looking for to safeguard their grass.

Analysts say UK companies will require to strike partnerships, using their know-how and innovation in order to make inroads.

They indicate SBTech's recent statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers most 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 stated.
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'It will simply depend'

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

The company has been investing in the US market given that 2011, when it acquired three US companies to establish a presence in Nevada.

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

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

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

"We certainly mean to have an extremely considerable brand name existence in New Jersey," he stated. "In other states, it will simply depend on regulation and potentially who our local partner is."

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

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