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UK wagering firms bet on US after sports betting wager ruling

5 June 2018
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By Natalie Sherman

Business press reporter, New York

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

From Tuesday, brand-new guidelines on sports betting came into result in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey might begin 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 method for states to permit sports betting.

The industry sees a "when in a generation" opportunity to develop a 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 combination, increased online competition and tougher guidelines from UK regulators, the timing is especially appropriate.

Why the gambling market faces an unsure future

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

But the market says counting on the US remains a dangerous bet, as UK business face complex state-by-state policy and competition from established local interests.

"It's something that we're really concentrating on, but equally we don't desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently acquired the US dream sports betting site FanDuel.

'Take some time'

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

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

The ruling discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that concern to local legislators.

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

Potential income varieties from $4.2 bn to practically $20bn every year depending on factors like the number 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'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I believe many people ... 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 some time'."

'Remains to be seen"
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Chris Grove, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in yearly revenue.

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

US laws minimal gaming mostly to Native American lands and Nevada's Las Vegas strip until fairly recently.

In the popular imagination, sports betting wagering has actually long been connected to a 1919 baseball World Series match-fixing scandal.
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States have actually also been slow to legalise numerous forms of online sports betting, regardless of a 2011 Justice Department viewpoint that appeared to get rid of obstacles.

While sports betting is typically seen in its own category, "it plainly remains to be seen whether it gets the kind 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 overseas online sportsbook and served prison time.

Now a specialist, he says UK companies ought to approach the marketplace thoroughly, picking partners with care and preventing errors that could cause regulator reaction.

"This is an opportunity for the American sports betting gambler ... I'm unsure whether it is a chance for organization," he states. "It really depends on the outcome of [state] legislation and how the business operators pursue the chance."

'It will be collaborations'
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As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, in addition to demands by US sports betting leagues, which wish to gather a percentage of profits as an "stability charge".

International companies deal with the added difficulty of an effective existing gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to safeguard their grass.

Analysts state UK firms will need to strike partnerships, offering their competence and innovation in order to make inroads.
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They indicate SBTech's recent announcement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers 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 said.

'It will simply depend'

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

The company has been investing in the US market given that 2011, when it acquired 3 US companies to develop a presence in Nevada.

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

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

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

"We certainly plan to have a very substantial brand name presence in New Jersey," he said. "In other states, it will simply depend on regulation and possibly who our local 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 occur on day one."

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