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

Business reporter, New york city

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

From Tuesday, new guidelines on sports betting entered into effect in Delaware, a tiny east coast state about two hours from Washington.

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

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

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

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

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But the market states depending on the US stays a risky bet, as UK companies deal with complex state-by-state policy and competitors from entrenched local interests.

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

'Take some time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits last year, according to a report by Technavio, external released in January.

Firms are intending to tap into more of that activity after last month's choice, 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 actually legalise sports betting wagering, leaving that question to regional legislators.

That is expected to result in considerable variation in how companies get licensed, where sports betting can take place, and which occasions are open to speculation - with big implications for the size of the market.

Potential earnings varieties from $4.2 bn to almost $20bn each year depending on factors like the number of states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

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

Now, he stated: "I believe many people ... are taking a look at this as, 'it's a chance however 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, forecasts that 32 states will legalise sports betting wagering in some kind by 2023, developing a market with about $6bn in yearly revenue.

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 limited gaming largely to Native American lands and Nevada's Las Vegas strip till fairly just recently.

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

States have likewise been slow to legalise numerous forms of online sports betting, despite a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting wagering is usually viewed in its own category, "it clearly 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 primary executive of BetonSports, who was detained in the US in 2006 for running an offshore online sportsbook and served prison time.

Now a specialist, he says UK firms must approach the market carefully, choosing partners with care and avoiding errors that might cause regulator backlash.

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

'It will be partnerships'

As legalisation starts, sports betting firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which desire to collect a percentage of earnings as an "integrity charge".

International companies deal with the added difficulty of a powerful existing gaming market, with gambling establishment operators, state-run lottery games and Native American tribes that are seeking to defend their grass.

Analysts say UK companies will require to strike collaborations, using their knowledge and innovation 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 sort of offers likely to materialise.

"It will be a win-win for everybody, but it will be and it will be driven by innovation," Mr Hawkley said.

'It will just depend'

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

The company has actually been purchasing the US market since 2011, when it bought 3 US companies to develop an existence 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 risk manager for the Delaware Lottery and has actually invested millions along with a local designer in a New Jersey horse racing track.

Mr Asher said William Hill has ended up being a home name in Nevada but that's not necessarily the objective all over.

"We certainly mean to have a very significant brand name presence in New Jersey," he said. "In other states, it will simply depend upon policy and potentially who our regional partner is."

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

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