UK sports betting companies gamble on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business press reporter, New York

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

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

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

The changes are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the way for states to permit sports betting wagering.

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

For UK companies, which are coming to grips with consolidation, increased online competition and harder rules from UK regulators, the timing is especially suitable.

Why the gaming industry faces an uncertain future
bet9ja.com
How does illegal sports betting work and what are the worries?

But the industry says relying on the US remains a dangerous bet, as UK business face complex state-by-state guideline and competitors from entrenched regional interests.

"It's something that we're actually focusing on, but equally we do not wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which just recently purchased the US website FanDuel.

'Take time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming earnings in 2015, according to a report by Technavio, external published in January.

Firms are wishing to use more of that activity after last month's decision, which struck down a 1992 federal law that barred states beyond Nevada and a few others from authorising sports betting wagering.

The ruling discovered 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 lawmakers.

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

Potential income ranges from $4.2 bn to almost $20bn every year depending upon factors like how numerous states transfer 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'", said Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he said: "I think a lot of people ... are looking 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"
bet9ja.com
Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some type by 2023, producing a market with about $6bn in annual earnings.
bet9ja.com
But bookmakers deal with a far different landscape in America than they carry out in the UK, where wagering shops are a regular sight.

US laws minimal sports betting mainly to Native American lands and Nevada's Las Vegas strip up until reasonably recently.
bet9ja.com
In the popular imagination, sports betting wagering has long been linked to a 1919 baseball World Series match-fixing scandal.

States have likewise been sluggish to legalise numerous forms of online gambling, regardless of a 2011 Justice Department opinion that appeared to remove obstacles.

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

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

Now a specialist, he states UK firms ought to approach the marketplace thoroughly, picking partners with care and preventing missteps that could lead to regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting wagering firms are lobbying to ward off high tax rates, along with requests by US sports betting leagues, which desire to collect a percentage of profits as an "stability cost".

International business deal with the added obstacle of a powerful existing gaming market, with gambling establishment operators, state-run lottery games and Native American tribes that are looking for to safeguard their turf.

Analysts state UK firms will require to strike partnerships, providing their expertise and technology in order to make inroads.
bet9ja.com
They indicate SBTech's recent announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the type of offers likely to materialise.

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

'It will just depend'

Joe Asher, primary executive at William Hill US, is clear-eyed about the truths.
bit.ly
The business has been purchasing the US market because 2011, when it purchased 3 US firms to establish an existence in Nevada.

William Hill now uses about 450 people in the US and has actually announced partnerships with gambling establishments in Iowa and New Jersey.

It works as risk manager for the Delaware Lottery and has actually invested millions alongside a regional designer in a New Jersey horse racing track.

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

"We certainly plan to have an extremely significant brand existence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our regional partner is."

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

More on this story

US judgment opens way for sports betting wagering

14 May 2018

Paddy Power buys fantasy sports betting site

23 May 2018