UK wagering firms gamble on US after sports betting wager judgment
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5 June 2018

By Natalie Sherman

Business reporter, New York

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

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

Neighbouring New Jersey might begin 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 enable sports betting wagering.

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

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

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But the industry states depending on the US stays a dangerous bet, as UK business face complex state-by-state guideline and competition from entrenched local interests.

"It's something that we're truly concentrating on, however equally we don't wish to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which recently purchased the US fantasy sports betting site FanDuel.

'Take time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming income in 2015, 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 barred states beyond Nevada and a few 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 really legalise sports betting, leaving that question to regional lawmakers.

That is expected to cause substantial variation in how companies get licensed, where sports betting can occur, and which events are open to speculation - with huge implications for the size of the market.

Potential profits varieties from $4.2 bn to almost $20bn yearly depending upon elements like how many states transfer 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 consultants KPMG.

Now, he said: "I believe many people ... are looking at this as, 'it's an opportunity 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, forecasts that 32 states will legalise sports betting in some form by 2023, developing a market with about $6bn in yearly earnings.

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

US laws restricted gambling mainly to Native American lands and Nevada's Las Vegas strip until reasonably just recently.

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

States have actually likewise been slow to legalise many types of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to get rid of challenges.

While sports betting wagering is usually seen in its own category, "it plainly stays 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 policy.

David Carruthers is the former president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served jail time.

Now a specialist, he states UK firms should approach the market carefully, selecting partners with care and preventing bad moves that could cause regulator reaction.

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

'It will be partnerships'

As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, as well as requests by US sports betting leagues, which want to gather a percentage of earnings as an "stability charge".

International business face the included challenge of a powerful existing video gaming industry, with casino operators, state-run lottos and Native American tribes that are looking for to protect their grass.

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

They point to SBTech's recent statement that it is providing innovation for Kentucky Derby operator Churchill Downs as an example of the kind of offers most likely to materialise.

"It will be a win-win for everyone, but it will be and it will be driven by technology," Mr Hawkley said.
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'It will simply depend'

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

The business has been investing in the US market since 2011, when it bought 3 US firms to establish a presence 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 danger manager for the Delaware Lottery and has actually invested millions along with a local developer in a New Jersey horse racing track.

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

"We certainly plan to have a really considerable brand name existence in New Jersey," he said. "In other states, it will just depend upon regulation and potentially who our local partner is."
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"The US is going to be the greatest sports betting market on the planet," he included. "Obviously that's not going to take place on the first day."

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