UK wagering firms bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business reporter, New York

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

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

Neighbouring New Jersey might start accepting sports betting bets as early as Friday.
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The changes are the first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting.

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

For UK companies, which are coming to grips with combination, increased online competition and harder guidelines from UK regulators, the timing is particularly appropriate.

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But the market states counting on the US stays a dangerous bet, as UK business deal with complex state-by-state regulation and competitors from entrenched regional interests.

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

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

Firms are hoping to use 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 ruling found the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that concern to regional lawmakers.

That is expected to cause substantial variation in how firms get licensed, where sports betting can take place, and which events are open to speculation - with huge ramifications for the size of the marketplace.

Potential earnings varieties from $4.2 bn to practically $20bn annually depending upon aspects like the number of states transfer 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 consultants KPMG.

Now, he stated: "I believe the majority of people ... are looking 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 take time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some kind by 2023, developing a market with about $6bn in yearly earnings.

But bookies deal with a far different landscape in America than they perform in the UK, where sports betting stores are a regular sight.

US laws limited sports betting mainly to Native American lands and Nevada's Las Vegas strip up until relatively recently.

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

States have actually likewise been sluggish to legalise many forms of online gambling, in spite of a 2011 Justice Department viewpoint that appeared to get rid of barriers.

While sports betting wagering is normally seen in its own category, "it plainly remains to be seen whether it gets the type of momentum individuals think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.

David Carruthers is the former president 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 should approach the market thoroughly, picking partners with care and preventing mistakes that might lead to regulator reaction.

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

'It will be partnerships'

As legalisation begins, sports betting companies are lobbying to fend off high tax rates, as well as requests by US sports betting leagues, which want to gather a portion of revenue as an "integrity fee".

International companies face the included obstacle of a powerful existing video gaming industry, with gambling establishment operators, state-run lottos and Native American tribes that are looking for to protect their turf.
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Analysts say UK firms will need to strike partnerships, offering their expertise 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 offers most likely to materialise.
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"It will be a win-win for everybody, but it will be collaborations and it will be driven by innovation," Mr Hawkley stated.

'It will just depend'

Joe Asher, primary executive 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 acquired three US firms to develop an existence in Nevada.

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

It works as danger manager for the Delaware Lottery and has actually invested millions together with a local developer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually become a home name in Nevada but that's not necessarily the goal everywhere.

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

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

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