UK wagering companies gamble on US after sports betting wager ruling
bet9ja.com
5 June 2018
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By Natalie Sherman

Business press reporter, New York
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It's high stakes for UK companies as sports betting wagering starts to spread out in America.

From Tuesday, brand-new rules on sports betting entered result 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 changes are the first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting wagering.

The market sees a "once in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who research study at Davy.

For UK firms, which are facing combination, increased online competitors and tougher rules from UK regulators, the timing is especially opportune.

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

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

'Take time'

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 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 judgment found 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 result in significant variation in how firms get licensed, where sports betting wagering can happen, and which events are open to speculation - with huge implications for the size of the market.

Potential earnings ranges from $4.2 bn to almost $20bn each year depending on elements like the number of states relocate to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

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

Now, he stated: "I believe the majority of people ... are taking a look 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, predicts that 32 states will legalise sports betting in some type by 2023, creating a market with about $6bn in yearly profits.

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

US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip till reasonably recently.

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

States have actually likewise been slow to legalise lots of types 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 remains to be seen whether it gets the type of momentum people think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

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

Now a consultant, he says UK firms need to approach the market thoroughly, picking partners with caution and avoiding missteps that could lead to regulator backlash.

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

'It will be collaborations'

As legalisation starts, sports betting wagering firms are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which desire to collect a percentage of revenue as an "stability fee".

International companies face the added challenge of an effective existing video gaming market, with gambling establishment operators, state-run lottery games and Native American tribes that are seeking to protect their grass.

Analysts say UK firms will require to strike collaborations, providing their competence and technology in order to make inroads.

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

"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, chief executive at William Hill US, is clear-eyed about the truths.

The company has actually been purchasing the US market given that 2011, when it bought 3 US companies to establish a presence in Nevada.

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

It works as threat manager for the Delaware Lottery and has invested millions together with a regional designer in a New Jersey horse racing track.

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

"We certainly mean to have an extremely significant brand presence in New Jersey," he stated. "In other states, it will simply depend on guideline and possibly who our local partner is."

"The US is going to be the most significant sports betting wagering market in the world," he included. "Obviously that's not going to happen on day one."

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