1 UK Betting Firms Gamble on uS After Sports Wager Ruling
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UK wagering firms bet on US after sports betting wager judgment
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5 June 2018

By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, brand-new guidelines on wagering entered 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 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.

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

For UK firms, which are grappling with debt consolidation, increased online competition and tougher guidelines from UK regulators, the timing is particularly appropriate.

Why the gambling industry faces an uncertain future

How does prohibited sports betting wagering work and what are the worries?

But the industry states relying on the US remains a risky bet, as UK companies face complicated state-by-state guideline and competitors from established regional interests.

"It's something that we're actually concentrating on, but equally we do not desire to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently bought the US fantasy sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits last year, according to a report by Technavio, external released in January.

Firms are intending to tap into 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 wagering.

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 local lawmakers.

That is expected to result in considerable variation in how firms get certified, where sports betting can take place, and which occasions are open to with big implications for the size of the marketplace.

Potential revenue ranges from $4.2 bn to nearly $20bn yearly depending on aspects like how many states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I think the majority of people ... are taking a look 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, anticipates that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in annual income.

But bookmakers deal with a far different landscape in America than they do in the UK, where wagering stores are a frequent sight.

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

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

States have likewise been sluggish to legalise numerous kinds of online sports betting, despite a 2011 Justice Department opinion that appeared to eliminate challenges.

While sports betting is typically viewed in its own classification, "it clearly stays to be seen whether it gets the kind of momentum individuals think 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 primary executive of BetonSports, who was arrested in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a specialist, he states UK firms need to approach the marketplace thoroughly, choosing partners with care and preventing bad moves that could cause regulator backlash.
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"This is an opportunity for the American sports betting wagerer ... I'm not exactly sure whether it is an opportunity for business," he says. "It truly depends on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be partnerships'

As legalisation starts, sports betting firms are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which want to collect a percentage of income as an "stability fee".

International companies deal with the added challenge of an effective existing video gaming industry, with gambling establishment operators, state-run lottery games and Native American people that are seeking to defend their turf.

Analysts say UK companies will need to strike collaborations, providing their know-how and innovation in order to make inroads.

They indicate SBTech's recent statement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the type of offers likely to materialise.

"It will be a win-win for everyone, but it will be collaborations 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 truths.

The company has actually been investing in the US market given that 2011, when it bought 3 US companies to develop 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 risk supervisor for the Delaware Lottery and has actually invested millions together with a local developer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a household name in Nevada however that's not necessarily the objective everywhere.

"We certainly plan to have a very considerable brand name presence 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 on the planet," he added. "Obviously that's not going to occur on the first day."

More on this story

US ruling opens way for sports betting

14 May 2018

Paddy Power buys fantasy sports betting website

23 May 2018
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