UK Betting Firms Gamble on uS After Sports Wager Ruling
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UK sports betting firms bet on US after sports betting wager judgment

5 June 2018
bet9ja.com
By Natalie Sherman

Business press reporter, New York

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

From Tuesday, new rules on wagering entered effect in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey might 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 "when in a generation" chance to develop a brand-new market in sports betting-mad America, said Dublin-based monetary analyst David Jennings, who heads leisure research study at Davy.

For UK firms, which are facing consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is especially suitable.

Why the gambling market faces an unsure future

How does prohibited sports betting wagering work and what are the worries?

But the industry says counting on the US stays a dangerous bet, as UK business deal with complex state-by-state policy and competition from entrenched local interests.

"It's something that we're actually concentrating on, but equally we don't desire to overhype it," said James Midmer, representative 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 video gaming earnings last year, according to a report by Technavio, external released in January.

Firms are intending to take advantage of more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting.

The ruling discovered the law was an over-reach of federal power. But the court it did not in fact legalise sports betting wagering, leaving that question to local legislators.

That is expected to cause significant variation in how firms get certified, where sports betting wagering can happen, and which events are open to speculation - with big ramifications for the size of the market.

Potential revenue ranges from $4.2 bn to nearly $20bn every year depending on factors like the number of states move to legalise, Oxford Economics approximated in a 2017 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 said: "I think many people ... 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 take time'."

'Remains to be seen"

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

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

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

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

States have actually also been slow to legalise lots of kinds of online gambling, in spite of a 2011 Justice Department opinion that appeared to eliminate obstacles.

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

David Carruthers is the former president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served jail time.

Now an expert, he says UK companies should approach the market carefully, picking partners with care and avoiding errors that might lead to regulator reaction.
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"This is a chance for the American sports betting wagerer ... I'm unsure whether it is a chance for business," he states. "It really depends on the result of [state] legislation and how the company operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which desire to gather a percentage of earnings as an "integrity charge".

International business face the included obstacle of an effective existing video gaming industry, with gambling establishment operators, state-run lottos and Native American people that are seeking to safeguard their turf.

Analysts state UK firms will need to strike collaborations, providing their knowledge and technology in order to make inroads.

They indicate SBTech's current announcement that it is providing innovation 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 everyone, but it will be collaborations 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 business has been buying the US market given that 2011, when it bought three US companies to establish an existence in Nevada.

William Hill now employs about 450 people in the US and has revealed partnerships with gambling establishments in Iowa and New Jersey.
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It works as risk manager for the Delaware Lottery and has invested millions alongside 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 all over.

"We definitely plan to have an extremely considerable brand existence in New Jersey," he said. "In other states, it will just depend upon policy and possibly who our regional partner is."
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"The US is going to be the greatest sports betting wagering market on the planet," he added. "Obviously that's not going to happen on day one."

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