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

5 June 2018

By Natalie Sherman

Business reporter, New York

It's high stakes for UK firms as starts to spread in America.

From Tuesday, brand-new guidelines on wagering entered into impact in Delaware, a tiny east coast state about two hours from Washington.

Neighbouring New Jersey could start accepting sports betting bets as early as Friday.

The modifications are the very first in what could become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting wagering.

The industry sees a "as soon as in a generation" opportunity to establish a new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research study at Davy.

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

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But the market states depending on the US stays a risky bet, as UK business face complex state-by-state policy and competition from entrenched regional interests.

"It's something that we're truly focusing on, but similarly we don't wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently acquired the US fantasy sports betting website FanDuel.
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'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming revenue in 2015, according to a report by Technavio, external released in January.

Firms are wanting to tap into 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.

The ruling 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 lead to considerable variation in how firms get accredited, where sports betting wagering can occur, and which occasions are open to speculation - with big ramifications for the size of the market.

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

"There was a great deal of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I think the majority of people ... are taking a look at this as, 'it's a chance 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, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some kind by 2023, producing a market with about $6bn in yearly income.
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But bookmakers face a far various landscape in America than they do in the UK, where wagering stores are a regular sight.

US laws limited gaming largely to Native American lands and Nevada's Las Vegas strip up until reasonably just recently.
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In the popular creativity, sports betting wagering has long been connected to a 1919 baseball World Series match-fixing scandal.

States have likewise been sluggish to legalise lots of kinds of online gambling, despite a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

While sports betting is generally seen in its own category, "it clearly stays to be seen whether it gets the type 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 primary executive of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served prison time.

Now a specialist, he states UK firms must approach the marketplace thoroughly, selecting partners with caution and avoiding bad moves that might lead to regulator backlash.

"This is a chance for the American sports betting bettor ... I'm not exactly sure whether it is a chance for business," he says. "It really depends on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be collaborations'
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As legalisation starts, sports betting wagering companies are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which desire to collect a percentage of earnings as an "integrity fee".

International business face the added challenge of a powerful existing video gaming market, with casino operators, state-run lotteries and Native American people that are seeking to safeguard their turf.
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Analysts say UK firms will need to strike collaborations, providing their expertise and technology in order to make inroads.

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

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

'It will just depend'

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

The business has actually been investing in the US market given that 2011, when it bought three US firms to establish a presence in Nevada.

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

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

Mr Asher stated William Hill has actually become a family name in Nevada but that's not always the objective all over.

"We certainly mean to have a really significant brand name presence in New Jersey," he said. "In other states, it will just depend on guideline and possibly who our regional partner is."

"The US is going to be the biggest sports betting market worldwide," he included. "Obviously that's not going to take place on day one."

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