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

5 June 2018

By Natalie Sherman
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Business press reporter, New york city

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

From Tuesday, brand-new rules on wagering entered result in Delaware, a coast state about 2 hours from Washington.

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

The modifications are the very first in what could end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.

The industry sees a "as soon as in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who heads leisure research study at Davy.
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For UK companies, which are facing consolidation, increased online competition and harder guidelines from UK regulators, the timing is especially opportune.

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But the market states counting on the US stays a dangerous bet, as UK companies deal with complex state-by-state policy and competition from established regional interests.

"It's something that we're actually focusing on, however similarly we don't desire to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US dream sports betting site FanDuel.
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'Require 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 intending to tap into more of that activity after last month's choice, which struck down a 1992 federal law that disallowed states outside of Nevada and a couple of others from authorising sports betting wagering.
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The judgment discovered the law was an over-reach of federal power. But the court it did not in fact legalise sports betting wagering, leaving that question to regional legislators.
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That is anticipated to cause considerable variation in how companies get accredited, where sports betting can happen, and which occasions are open to speculation - with big ramifications for the size of the market.

Potential revenue varieties from $4.2 bn to almost $20bn yearly depending on aspects like how numerous states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

"There was a great deal of 'this is going to be big'", stated Will Hawkley, London-based head of leisure for experts KPMG.

Now, he said: "I believe the majority of 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 take some time'."

'Remains to be seen"

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

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

US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip up until 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 kinds of online sports betting, in spite of a 2011 Justice Department opinion that appeared to remove challenges.

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

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

Now a consultant, he states UK firms must approach the marketplace carefully, picking partners with caution and avoiding bad moves that could cause regulator backlash.

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

'It will be partnerships'

As legalisation starts, sports betting firms are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which desire to gather a percentage of profits as an "stability fee".

International business face the included difficulty of a powerful existing gaming market, with casino operators, state-run lotteries and Native American tribes that are seeking to protect their grass.

Analysts say UK firms will require to strike collaborations, offering their proficiency and innovation in order to make inroads.

They indicate SBTech's current statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind of offers likely to materialise.
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"It will be a win-win for everyone, but it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

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

The company has actually been purchasing the US market because 2011, when it bought three US firms to establish an existence in Nevada.

William Hill now uses about 450 individuals in the US and has revealed collaborations 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 stated William Hill has become a family name in Nevada but that's not always the goal everywhere.

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

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

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