UK sports betting companies bet on US after sports betting wager judgment
bet9ja.com
5 June 2018

By Natalie Sherman

Business reporter, New York

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

From Tuesday, new guidelines on wagering entered into impact in Delaware, a tiny east 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 might end up being a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting wagering.

The market sees a "when 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.

For UK companies, which are grappling with consolidation, increased online competition and harder guidelines from UK regulators, the timing is especially suitable.

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But the market states relying on the US remains a risky bet, as UK business face complex state-by-state guideline and competition from established local interests.
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"It's something that we're really concentrating on, but similarly we don't wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently purchased the US fantasy sports betting site FanDuel.

'Take time'

The US represented 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 hoping 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.

The ruling found the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that question to regional legislators.

That is anticipated to lead to significant variation in how firms get licensed, where sports betting can take place, and which occasions are open to speculation - with big implications for the size of the market.

Potential profits varieties from $4.2 bn to practically $20bn annually depending upon factors like how lots of states move to legalise, Oxford Economics approximated 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 experts KPMG.

Now, he said: "I believe a lot of individuals ... 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, forecasts that 32 states will legalise sports betting in some form by 2023, creating a market with about $6bn in annual income.
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But bookies deal with a far various landscape in America than they carry out in the UK, where sports betting stores are a frequent sight.

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

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

States have also been sluggish to legalise many types of online gaming, in spite of a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting wagering is normally viewed in its own classification, "it plainly stays to be seen whether it gets the type of momentum individuals believe 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 primary executive of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served jail time.

Now an expert, he says UK firms should approach the marketplace carefully, picking partners with care and avoiding bad moves that could lead to regulator backlash.
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"This is a chance for the bettor ... I'm unsure whether it is a chance for company," he states. "It truly is dependent on the result of [state] legislation and how the company operators pursue the opportunity."

'It will be collaborations'

As legalisation begins, sports betting wagering companies are lobbying to fend off high tax rates, along with requests by US sports betting leagues, which want to collect a percentage of profits as an "stability cost".

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

Analysts state UK companies will require to strike collaborations, using their know-how and technology in order to make inroads.

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

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

'It will simply depend'

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

The business has actually been buying the US market considering that 2011, when it bought 3 US companies to develop a presence in Nevada.
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William Hill now utilizes about 450 individuals in the US and has actually revealed collaborations with gambling establishments in Iowa and New Jersey.

It works as risk manager for the Delaware Lottery and has invested millions along with a local developer in a New Jersey horse racing track.
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Mr Asher stated William Hill has become a home name in Nevada however that's not necessarily the objective all over.
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"We definitely intend to have a really significant brand existence in New Jersey," he said. "In other states, it will simply depend upon guideline and potentially who our regional partner is."

"The US is going to be the most significant sports betting wagering market on the planet," he included. "Obviously that's not going to happen on the first day."

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