UK wagering firms gamble on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business reporter, New York
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It's high stakes for UK firms as sports betting wagering starts to spread out in America.

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

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 "as soon as in a generation" opportunity 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 firms, which are coming to grips with debt consolidation, increased online competition and harder rules from UK regulators, the timing is particularly opportune.

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But the market states counting on the US stays a risky bet, as UK companies deal with complicated state-by-state regulation and competitors from established local interests.

"It's something that we're truly concentrating on, but similarly we do not wish to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently bought the US fantasy sports betting website FanDuel.
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'Take some time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits in 2015, according to a report by Technavio, external released in January.
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Firms are intending to use more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states outside of 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 wagering, leaving that question to regional lawmakers.

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

Potential revenue varieties from $4.2 bn to almost $20bn every year depending on factors like how many states transfer to legalise, Oxford Economics approximated 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.
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Now, he said: "I think many individuals ... 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 take time'."
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'Remains to be seen"

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

But bookies deal with a far various landscape in America than they perform in the UK, where wagering stores are a frequent sight.

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

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

States have likewise been sluggish to legalise many types of online sports betting, despite a 2011 Justice Department viewpoint that appeared to remove challenges.

While sports betting is generally viewed in its own classification, "it clearly stays to be seen whether it gets the sort of momentum individuals think it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering policy.

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

Now an expert, he states UK companies need to approach the marketplace carefully, choosing partners with caution and avoiding mistakes that might result in regulator backlash.

"This is an opportunity for the American sports betting gambler ... I'm uncertain whether it is a chance for organization," he says. "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 firms are lobbying to fend off high tax rates, along with requests by US sports betting leagues, which desire to gather a portion of profits as an "stability fee".

International business deal with the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lotteries and Native American people that are seeking to safeguard their turf.

Analysts say UK firms will need to strike collaborations, offering their competence and innovation in order to make inroads.
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They point to SBTech's recent statement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the kind of deals most likely to materialise.

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

'It will simply depend'

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

The business has been buying the US market given that 2011, when it acquired 3 US companies to establish an existence in Nevada.
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William Hill now employs about 450 people in the US and has actually announced collaborations with gambling establishments in Iowa and New Jersey.

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

Mr Asher said William Hill has become a family name in Nevada however that's not necessarily the objective all over.

"We definitely plan to have an extremely considerable brand presence in New Jersey," he said. "In other states, it will just depend upon policy and potentially who our local 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 day one."

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