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

5 June 2018

By Natalie Sherman

reporter, New york city

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

From Tuesday, new rules on sports betting came into impact in Delaware, a tiny east coast state about 2 hours from Washington.

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

The modifications are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the way for states to enable sports betting.

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

For UK firms, which are facing consolidation, increased online competition and tougher rules from UK regulators, the timing is particularly opportune.

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But the market states depending on the US stays a dangerous bet, as UK companies deal with complicated state-by-state guideline and competitors from entrenched regional interests.

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

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

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

The judgment 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 lawmakers.

That is expected to result in significant variation in how companies get accredited, where sports betting wagering can happen, and which occasions are open to speculation - with big ramifications for the size of the market.

Potential income ranges from $4.2 bn to almost $20bn each year depending on aspects like the number of states relocate to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.
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"There was a great deal of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I believe a lot of people ... are looking 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 require time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some type by 2023, producing a market with about $6bn in yearly income.

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

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

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

States have actually likewise been slow to legalise numerous forms of online sports betting, regardless of a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

While sports betting wagering is generally seen in its own classification, "it clearly stays to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering guideline.

David Carruthers is the previous chief executive of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a consultant, he says UK companies ought to approach the market carefully, choosing partners with care and preventing bad moves that might cause regulator backlash.

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

'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 want to collect a percentage of income as an "integrity fee".

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

Analysts state UK companies will need to strike partnerships, offering their competence and innovation in order to make inroads.

They point to SBTech's recent 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 everyone, however it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

The company has been purchasing the US market considering that 2011, when it acquired 3 US companies to establish a presence in Nevada.
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William Hill now employs about 450 individuals in the US and has announced collaborations with casinos in Iowa and New Jersey.

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

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

"We certainly intend to have an extremely significant brand presence in New Jersey," he stated. "In other states, it will just depend upon regulation and potentially who our local partner is."

"The US is going to be the most significant sports betting market in the world," he added. "Obviously that's not going to take place on the first day."
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