UK Betting Firms Gamble on uS After Sports Wager Ruling

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UK wagering companies bet on US after sports wager judgment

UK sports betting companies bet on US after sports betting wager ruling

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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 in America.


From Tuesday, new guidelines on wagering entered impact in Delaware, a small east coast state about 2 hours from Washington.


Neighbouring New Jersey could begin 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 way for states to enable sports betting wagering.


The market sees a "once in a generation" opportunity to establish a brand-new market in sports betting-mad America, stated 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 rules from UK regulators, the timing is particularly appropriate.


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But the market says counting on the US remains a dangerous bet, as UK companies deal with complicated state-by-state guideline and competition from established regional interests.


"It's something that we're truly concentrating on, however similarly we don't desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently purchased the US dream sports betting website FanDuel.


'Take time'


The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income in 2015, according to a report by Technavio, external published in January.


Firms are wishing to take advantage of more of that activity after last month's decision, which struck down a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting wagering.


The judgment discovered the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that concern to local lawmakers.


That is expected to lead to substantial variation in how firms get licensed, where sports wagering can occur, and which events are open to speculation - with big implications for the size of the market.


Potential revenue ranges from $4.2 bn to nearly $20bn each year depending upon aspects like the number of states move to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.


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


Now, he stated: "I believe 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, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some form by 2023, developing a market with about $6bn in annual profits.

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But bookmakers deal with a far different landscape in America than they do 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 creativity, sports betting wagering has actually long been connected to a 1919 baseball World Series match-fixing scandal.


States have actually also been slow to legalise lots of kinds of online gambling, in spite of a 2011 Justice Department opinion that appeared to get rid of barriers.

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While sports betting wagering is typically viewed in its own category, "it plainly stays to be seen whether it gets the kind of momentum individuals believe it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting policy.


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


Now a consultant, he says UK companies need to approach the marketplace thoroughly, selecting partners with care and preventing missteps that could result in regulator backlash.


"This is an opportunity for the American sports betting wagerer ... I'm not exactly sure whether it is an opportunity for service," he says. "It really is dependent on the outcome 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 want to gather a portion of income as an "stability charge".

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International business deal with the added difficulty of an effective existing gaming market, with casino operators, state-run lottery games and Native American tribes that are looking for to defend their grass.


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


They point to SBTech's current statement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.


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

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'It will just depend'


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


The business has been purchasing the US market since 2011, when it bought three US firms to develop a presence in Nevada.


William Hill now uses about 450 people in the US and has actually announced collaborations with casinos in Iowa and New Jersey.


It works as threat supervisor for the Delaware Lottery and has invested millions along with a regional developer in a New Jersey horse racing track.


Mr Asher said William Hill has ended up being a home name in Nevada but that's not always the goal everywhere.


"We certainly intend to have a very considerable brand existence in New Jersey," he stated. "In other states, it will simply depend on policy and possibly who our local partner is."


"The US is going to be the biggest sports betting wagering market in the world," he added. "Obviously that's not going to occur on day one."


More on this story


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Paddy Power buys fantasy sports betting site


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