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 city

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

From Tuesday, new guidelines on wagering came into impact in Delaware, a tiny east coast state about 2 hours from Washington.
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Neighbouring New Jersey could start accepting sports betting bets as early as Friday.

The changes are the first in what could end up being a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting.

The market sees a "as soon as in a generation" chance to develop a brand-new market in sports betting-mad America, said 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 especially suitable.

Why the deals with an uncertain future

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

But the industry says depending on the US stays a risky bet, as UK business face complicated state-by-state regulation and competition from established local interests.

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

'Require time'

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

Firms are wanting to use 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.
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The ruling discovered the law was an over-reach of federal power. But the court it did not in fact legalise sports betting, leaving that concern to regional legislators.

That is expected to lead to considerable variation in how firms get certified, where sports betting can occur, and which occasions are open to speculation - with big ramifications for the size of the marketplace.

Potential profits varieties from $4.2 bn to nearly $20bn yearly depending on 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 great deal of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I believe a lot of individuals ... are taking a look 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 require time'."

'Remains to be seen"

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

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

US laws minimal sports betting mainly to Native American lands and Nevada's Las Vegas strip until fairly just recently.

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

States have also been sluggish to legalise many kinds of online gaming, in spite of a 2011 Justice Department opinion that appeared to remove barriers.
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While sports betting wagering is generally viewed in its own classification, "it plainly remains to be seen whether it gets the kind of momentum individuals think it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting regulation.

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

Now a consultant, he says UK firms must approach the marketplace thoroughly, picking partners with care and preventing mistakes that could cause regulator backlash.

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

'It will be collaborations'

As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which want to collect a percentage of revenue as an "stability charge".

International business deal with the added obstacle of a powerful existing video gaming market, with gambling establishment operators, state-run lottery games and Native American people that are seeking to safeguard their turf.
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Analysts state UK companies will need to strike collaborations, using their knowledge and technology in order to make inroads.

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

"It will be a win-win for everybody, however it will be partnerships and it will be driven by technology," Mr Hawkley said.

'It will just depend'

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

The business has actually been investing in the US market considering that 2011, when it acquired three US companies to establish a presence in Nevada.

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

It works as risk 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 household name in Nevada but that's not always the goal everywhere.

"We certainly intend to have an extremely substantial brand presence in New Jersey," he stated. "In other states, it will simply depend upon guideline 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 happen on the first day."

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