UK Betting Firms Gamble on United States After Sports Wager Ruling

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UK betting companies bet on US after sports wager ruling

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


5 June 2018

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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, new rules on wagering entered effect in Delaware, a tiny east coast state about two hours from Washington.

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


The modifications 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 allow sports betting wagering.


The industry sees a "once in a generation" opportunity to develop a brand-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 facing combination, increased online competition and tougher guidelines from UK regulators, the timing is especially opportune.


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But the industry says depending on the US remains a risky bet, as UK companies deal with complicated state-by-state policy and competitors from established regional interests.


"It's something that we're really concentrating on, however equally we don't wish to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which recently bought the US fantasy sports betting site FanDuel.


'Take time'


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


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


The ruling discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to local lawmakers.


That is anticipated to lead to substantial variation in how firms get accredited, where sports betting can occur, and which events are open to speculation - with big ramifications for the size of the market.


Potential earnings ranges from $4.2 bn to practically $20bn yearly depending upon elements like the number of states transfer to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.


"There was a great deal of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for specialists KPMG.


Now, he said: "I think many people ... are taking a look 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 require time'."


'Remains to be seen"


Chris Grove, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some form by 2023, developing a market with about $6bn in annual income.


But bookies face a far different landscape in America than they carry out in the UK, where wagering stores are a frequent sight.


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


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


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


While sports betting wagering is normally seen in its own category, "it plainly stays to be seen whether it gets the sort of momentum individuals believe it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.


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

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Now a consultant, he says UK firms need to approach the market thoroughly, selecting partners with caution and avoiding bad moves that might cause regulator backlash.


"This is a chance for the American sports betting bettor ... I'm not sure whether it is an opportunity for business," he states. "It really depends on the outcome of [state] legislation and how business operators pursue the chance."


'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 want to gather a percentage of profits as an "stability charge".


International companies deal with the included obstacle of a powerful existing gaming market, with casino operators, state-run lotteries and Native American tribes that are seeking to defend their turf.


Analysts state UK firms will need to strike collaborations, offering their expertise and innovation in order to make inroads.


They point to SBTech's current announcement that it is providing technology 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 technology," Mr Hawkley said.


'It will simply depend'


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


The company has actually been investing in the US market because 2011, when it bought three US firms to establish a presence in Nevada.


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


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


Mr Asher stated William Hill has become a household name in Nevada but that's not always the goal everywhere.


"We definitely plan to have a very considerable brand existence in New Jersey," he stated. "In other states, it will just depend upon policy and potentially who our local partner is."


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


More on this story


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14 May 2018


Paddy Power purchases dream sports betting website


23 May 2018

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