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

Business reporter, New York

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

From Tuesday, new guidelines on sports betting 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 become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting.

The market sees a "when in a generation" chance to develop a brand-new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.

For UK firms, which are facing debt consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is particularly opportune.

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But the industry says 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 really concentrating on, however equally we do not desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently purchased the US fantasy sports betting site FanDuel.

'Take time'

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

Firms are wishing 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 wagering.

The judgment found 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 expected to cause significant variation in how companies get licensed, where sports betting wagering can occur, and which occasions are open to speculation - with big ramifications for the size of the marketplace.

Potential revenue varieties from $4.2 bn to nearly $20bn yearly depending on elements like how many states relocate to legalise, Oxford Economics approximated in a 2017 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 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, anticipates that 32 states will legalise sports betting wagering in some type by 2023, producing a market with about $6bn in yearly income.

But bookies face a far various landscape in America than they do in the UK, where wagering stores are a regular sight.

US laws minimal gaming mainly to Native American lands and Nevada's Las Vegas strip till fairly recently.

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

States have also been slow to legalise many types of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to get rid of challenges.

While sports betting is usually viewed in its own category, "it clearly stays to be seen whether it gets the type of momentum people believe it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting policy.

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

Now an expert, he states UK firms should approach the market thoroughly, selecting partners with care and avoiding bad moves that could cause regulator reaction.

"This is an opportunity for the American sports betting bettor ... I'm not exactly sure whether it is an opportunity for service," he states. "It really is dependent on the result of [state] legislation and how the organization operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which want to collect a portion of revenue as an "integrity fee".

International business deal with the included difficulty of a powerful existing gaming market, with gambling establishment operators, state-run lottery games and Native American people that are seeking to protect their grass.

Analysts say UK companies will require to strike partnerships, using their knowledge and innovation in order to make inroads.

They point to SBTech's current statement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.

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

'It will simply depend'

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

The company has actually been buying the US market since 2011, when it bought three US companies to establish a presence in Nevada.

William Hill now utilizes about 450 people in the US and has revealed partnerships with casinos in Iowa and New Jersey.

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

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

"We definitely intend to have an extremely considerable brand existence in New Jersey," he said. "In other states, it will simply depend upon policy and possibly who our local partner is."

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

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