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

Business press reporter, New York

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

From Tuesday, brand-new guidelines on wagering came into effect in Delaware, a tiny east coast state about 2 hours from Washington.

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

The changes are the very first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting.

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

For UK firms, which are grappling with debt consolidation, increased online competitors and harder rules from UK regulators, the timing is particularly opportune.

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But the market states counting on the US remains a risky bet, as UK business deal with complex state-by-state guideline and competition from entrenched regional interests.

"It's something that we're really focusing on, but equally we don't wish to overhype it," said James Midmer, spokesperson 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 video gaming revenue in 2015, according to a report by Technavio, external published in January.

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

The judgment found 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 lead to significant variation in how companies get accredited, where sports betting wagering can happen, and which events are open to speculation - with big ramifications for the size of the marketplace.

Potential profits ranges from $4.2 bn to nearly $20bn every year depending upon aspects like how numerous states transfer to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming .

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

Now, he said: "I think many people ... are taking a look at this as, 'it's a chance 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"

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

But bookies deal with a far various landscape in America than they carry out in the UK, where sports betting shops are a frequent sight.

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

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

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

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

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

Now a specialist, he says UK companies must approach the marketplace carefully, choosing partners with care and avoiding mistakes that could lead to regulator reaction.

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

'It will be collaborations'

As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of earnings as an "integrity cost".

International companies deal with the added difficulty of a powerful existing video gaming industry, with casino operators, state-run lotteries and Native American tribes that are seeking to protect their grass.

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

They indicate SBTech's recent announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the kind of offers most likely to materialise.

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

'It will simply depend'

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

The business has been investing in the US market given that 2011, when it bought 3 US firms to develop a presence in Nevada.

William Hill now employs about 450 people in the US and has revealed partnerships with gambling establishments in Iowa and New Jersey.

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

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

"We definitely mean to have a very significant brand name presence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our local partner is."

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

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