UK wagering firms bet on US after sports betting wager judgment
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5 June 2018

By Natalie Sherman

Business reporter, New york city

It's high stakes for UK companies as sports betting starts to spread out in America.
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From Tuesday, brand-new rules on wagering entered into impact in Delaware, a small east coast state about 2 hours from Washington.

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

The changes 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.

The industry sees a "once in a generation" chance to develop a new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.

For UK companies, which are facing consolidation, increased online competition and harder rules from UK regulators, the timing is particularly opportune.
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But the market states relying on the US stays a risky bet, as UK companies deal with complex state-by-state regulation and competitors from established local interests.
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"It's something that we're really focusing on, however equally we do not wish to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which just recently acquired the US fantasy sports betting site FanDuel.

'Require time'

The US represented about 23% of the world's $244bn (₤ 182bn) in gaming profits last year, according to a report by Technavio, external released in January.
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Firms are wishing to tap into more of that activity after last month's choice, which struck down a 1992 federal law that disallowed 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, leaving that concern to regional lawmakers.
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That is anticipated to lead to considerable variation in how companies get licensed, where sports betting can happen, and which events are open to speculation - with big ramifications for the size of the .

Potential profits varieties from $4.2 bn to practically $20bn each year depending upon elements like the number of states transfer 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 big'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he said: "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 time'."

'Remains to be seen"

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

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

US laws restricted sports betting largely to Native American lands and Nevada's Las Vegas strip until reasonably just recently.

In the popular imagination, 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 numerous kinds of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to get rid of challenges.

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

David Carruthers is the former chief executive of BetonSports, who was apprehended 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, choosing partners with care and preventing bad moves that could lead to regulator backlash.

"This is an opportunity for the American sports betting wagerer ... I'm not sure whether it is an opportunity for business," he states. "It truly is dependent on the outcome of [state] legislation and how the organization operators pursue the opportunity."

'It will be collaborations'

As legalisation begins, sports betting companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of earnings as an "stability fee".

International business face the included obstacle of a powerful existing video gaming market, with gambling establishment operators, state-run lotteries and Native American tribes that are looking for to defend their grass.

Analysts state UK companies will require to strike collaborations, using their competence and innovation in order to make inroads.

They indicate SBTech's current statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the kind of offers likely to materialise.

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

'It will simply depend'

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

The company has actually been investing in the US market since 2011, when it purchased three US firms to develop an existence in Nevada.

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

It works as risk supervisor for the Delaware Lottery and has actually invested millions alongside a local designer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a home name in Nevada however that's not necessarily the objective everywhere.

"We certainly plan to have a really substantial brand presence in New Jersey," he stated. "In other states, it will just depend upon 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 happen on day one."

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