1 UK Betting Firms Gamble on United States After Sports Wager Ruling

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UK betting firms gamble on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

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

From Tuesday, new rules on wagering entered into effect 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 modifications are the very first in what might become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting wagering.

The market sees a "once in a generation" chance to establish a brand-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 grappling with combination, increased online competition and tougher rules from UK regulators, the timing is particularly opportune.
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But the market says depending on the US remains a risky bet, as UK business face complicated state-by-state guideline and competitors from entrenched regional interests.

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

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in 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 decision, which struck down a 1992 federal law that disallowed states beyond Nevada and a few others from authorising sports betting.

The ruling found the law was an over-reach of federal power. But the court it did not in fact legalise sports betting wagering, leaving that concern to regional legislators.
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That is expected to lead to substantial variation in how companies get accredited, where sports betting wagering can take place, and which events are open to speculation - with huge ramifications for the size of the market.

Potential earnings varieties from $4.2 bn to almost $20bn every year depending on elements like how lots of states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

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

Now, he said: "I believe many people ... are looking 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 some time'."

'Remains to be seen"

Chris Grove, managing 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 revenue.

But bookmakers face a far various landscape in America than they carry out in the UK, where wagering shops are a regular sight.

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

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

States have also been sluggish to legalise many types of online gaming, in spite of a 2011 Justice Department opinion that appeared to get rid of barriers.

While sports betting wagering is generally viewed in its own category, "it clearly remains to be seen whether it gets the kind of momentum people believe it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering regulation.

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

Now a specialist, he states UK companies need to approach the marketplace carefully, selecting partners with caution and avoiding mistakes that might cause regulator backlash.

"This is a chance for the American sports betting gambler ... I'm uncertain whether it is a chance for business," he says. "It really is dependent on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be collaborations'

As legalisation starts, sports betting firms are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which wish to collect a portion of revenue as an "integrity charge".

International business face the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lottery games and Native American tribes that are looking for to safeguard their grass.

Analysts state UK companies will need to strike partnerships, using their expertise and technology in order to make inroads.

They point to SBTech's current statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind of deals likely to materialise.

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

'It will just depend'

Joe Asher, primary 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 firms to establish a presence in Nevada.

William Hill now utilizes about 450 people in the US and has actually revealed collaborations with gambling establishments in Iowa and New Jersey.

It works as danger supervisor for the Delaware Lottery and has invested millions along with a regional designer in a New Jersey horse racing track.

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

"We definitely mean to have a very substantial brand name presence in New Jersey," he stated. "In other states, it will simply depend upon regulation and possibly who our regional partner is."

"The US is going to be the greatest sports betting wagering market on the planet," he added. "Obviously that's not going to take place on the first day."

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