UK wagering companies gamble on US after sports betting wager ruling
bet9ja.com
5 June 2018

By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, new rules on wagering entered result in Delaware, a tiny east coast state about 2 hours from Washington.

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

The changes are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.

The industry sees a "as soon as 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 study at Davy.

For UK companies, which are coming to grips with consolidation, increased online competitors and harder guidelines from UK regulators, the timing is particularly suitable.

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But the industry states relying on the US stays a dangerous bet, as UK business deal with complex state-by-state policy and competition from established local interests.

"It's something that we're really concentrating on, but equally we do not desire to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which recently purchased the US fantasy sports betting website FanDuel.

'Require time'

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

Firms are wanting to take advantage of more of that activity after last month's choice, which overruled a 1992 that barred states outside of Nevada and a couple of others from authorising sports betting wagering.

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

That is expected to result in considerable 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 market.

Potential income ranges from $4.2 bn to almost $20bn yearly depending on aspects like how numerous states transfer to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

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

Now, he said: "I believe many people ... are looking at this as, 'it's an opportunity 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, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some type by 2023, producing a market with about $6bn in annual income.

But bookmakers face a far different landscape in America than they perform in the UK, where sports betting shops are a regular sight.

US laws limited gaming mainly to Native American lands and Nevada's Las Vegas strip up until reasonably just recently.

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

States have likewise been slow to legalise lots of types of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to remove obstacles.

While sports betting is generally seen in its own category, "it plainly stays to be seen whether it gets the kind of momentum people think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.

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 states UK companies must approach the market carefully, choosing partners with caution and preventing missteps that might cause regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting companies are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which desire to collect a percentage of revenue as an "integrity fee".

International companies deal with the added challenge of an effective existing video gaming market, with casino operators, state-run lottos and Native American tribes that are looking for to defend their grass.

Analysts say UK firms will need to strike partnerships, providing their expertise and innovation in order to make inroads.

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

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

'It will simply depend'

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

The business has actually been buying the US market because 2011, when it purchased three US companies to develop a presence in Nevada.

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

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

Mr Asher stated William Hill has actually ended up being a family name in Nevada however that's not always the goal everywhere.

"We certainly plan to have an extremely considerable brand name existence in New Jersey," he said. "In other states, it will just depend on policy and possibly who our local partner is."

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

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