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UK wagering firms bet on US after sports betting wager judgment
bet9ja.com
5 June 2018

By Natalie Sherman

Business press reporter, New York

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

From Tuesday, brand-new rules on wagering entered impact in Delaware, a tiny 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 way for states to permit sports betting wagering.

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

For UK companies, which are grappling with consolidation, increased online competitors and harder guidelines from UK regulators, the timing is particularly appropriate.

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But the market says relying on the US remains a dangerous bet, as UK companies face policy and competition from entrenched local interests.

"It's something that we're really concentrating on, but similarly we don't wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting website FanDuel.

'Require time'

The US represented about 23% of the world's $244bn (₤ 182bn) in 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 barred states outside of 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 concern to regional legislators.

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

Potential earnings varieties from $4.2 bn to almost $20bn each year depending on aspects like the number of states relocate to legalise, Oxford Economics estimated 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 specialists KPMG.

Now, he stated: "I think a lot of individuals ... are looking 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 take time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some kind by 2023, producing a market with about $6bn in annual profits.

But bookmakers deal with a far different landscape in America than they do in the UK, where sports betting stores are a frequent sight.

US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip until reasonably just recently.

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

States have actually likewise been slow to legalise many kinds of online sports betting, despite a 2011 Justice Department viewpoint that appeared to get rid of barriers.

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

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

Now a specialist, he states UK firms need to approach the market carefully, picking partners with caution and preventing errors that might lead to regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of profits as an "integrity fee".

International business face the included difficulty of an effective existing video gaming market, with casino operators, state-run lottos and Native American people that are looking for to safeguard their turf.

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

They indicate SBTech's recent 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, but it will be partnerships and it will be driven by technology," Mr Hawkley said.

'It will just depend'

Joe Asher, chief executive at William Hill US, is clear-eyed about the realities.

The business has actually been purchasing the US market since 2011, when it acquired three US companies to establish a presence in Nevada.

William Hill now uses about 450 individuals in the US and has actually announced partnerships with casinos in Iowa and New Jersey.

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

Mr Asher stated William Hill has actually become a home name in Nevada however that's not always the objective all over.

"We definitely mean to have a very considerable brand name presence in New Jersey," he said. "In other states, it will simply depend on 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 happen on the first day."

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