UK sports betting firms bet 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

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

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

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

The modifications are the very first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting.

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

For UK firms, which are coming to grips with debt consolidation, increased online competition and tougher guidelines from UK regulators, the timing is particularly suitable.

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But the market says counting on the US remains a dangerous bet, as UK companies face complicated state-by-state regulation and competition from entrenched local interests.

"It's something that we're actually focusing on, however equally we do not desire to overhype it," stated James Midmer, representative at Paddy Power Betfair, which just recently bought the US dream sports betting site FanDuel.
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'Take time'

The US represented about 23% of the world's $244bn (₤ 182bn) in gaming revenue last year, according to a report by Technavio, external published 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 discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting wagering, leaving that concern to regional legislators.

That is anticipated to result in significant variation in how firms get licensed, where sports betting wagering can occur, and which occasions are open to speculation - with big implications for the size of the marketplace.

Potential income ranges from $4.2 bn to nearly $20bn yearly depending upon elements like the number 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'", said Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he said: "I think many 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 take some time'."

'Remains to be seen"

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

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

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

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

States have also been slow to legalise lots of kinds of online sports betting, in spite of a 2011 Justice Department viewpoint that appeared to eliminate barriers.

While sports betting wagering is normally viewed in its own category, "it plainly remains to be seen whether it gets the type of momentum individuals believe it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting 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 an expert, he says UK firms need to approach the marketplace thoroughly, choosing partners with caution and preventing errors that might cause regulator backlash.

"This is an opportunity for the American sports betting wagerer ... I'm uncertain whether it is an opportunity for service," he states. "It actually depends on the outcome of [state] legislation and how the service operators pursue the opportunity."

'It will be collaborations'
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As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which desire to gather a percentage of revenue as an "integrity fee".

International business deal with the included challenge of an effective existing video gaming market, with casino operators, state-run lotteries and Native American people that are seeking to safeguard their grass.

Analysts say UK firms will require to strike partnerships, offering their know-how and innovation in order to make inroads.

They point to SBTech's recent announcement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the type of deals 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.
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'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 acquired 3 US companies to establish a presence in Nevada.

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

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

Mr Asher stated William Hill has ended up being a household name in Nevada however that's not necessarily the objective all over.

"We certainly plan to have an extremely considerable brand name presence in New Jersey," he stated. "In other states, it will simply depend on guideline 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 occur on the first day."

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