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UK sports betting firms gamble on US after sports betting wager ruling

5 June 2018

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

From Tuesday, brand-new rules on wagering came into result in Delaware, a tiny east coast state about two hours from Washington.
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Neighbouring New Jersey might begin accepting sports betting bets as early as Friday.
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The changes are the very first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.

The industry sees a "once in a generation" opportunity to establish a new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research study at Davy.

For UK companies, which are grappling with combination, increased online competition and tougher rules from UK regulators, the timing is especially suitable.

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But the industry says depending on the US stays a dangerous bet, as UK business deal with complex state-by-state regulation and competition from established regional interests.

"It's something that we're really concentrating on, but equally we don't want to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently purchased the US dream sports betting website FanDuel.

'Take time'

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

Firms are wanting to tap into more of that activity after last month's choice, which struck down a 1992 federal law that barred states beyond Nevada and a few others from authorising sports betting wagering.

The ruling discovered the law was an over-reach of federal power. But the court it did not actually legalise sports betting, leaving that concern to regional legislators.

That is expected to result in considerable variation in how firms get certified, where sports betting can occur, and which events are open to speculation - with huge implications for the size of the market.

Potential revenue varieties from $4.2 bn to nearly $20bn each year depending on aspects like how numerous states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for consultants KPMG.
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Now, he said: "I believe many people ... are looking 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 some time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some kind by 2023, creating a market with about $6bn in yearly revenue.

But bookmakers face a far different landscape in America than they do in the UK, where sports betting stores are a frequent sight.

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

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

States have also been sluggish to legalise lots of types of online gambling, despite a 2011 Justice Department viewpoint that appeared to remove obstacles.

While sports betting is generally seen in its own classification, "it clearly stays to be seen whether it gets the kind of momentum people believe 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 president of BetonSports, who was arrested 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 carefully, selecting partners with care and preventing errors that might result in regulator reaction.

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

'It will be collaborations'

As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, in addition to demands by US sports betting leagues, which want to gather a percentage of profits as an "integrity charge".

International companies face the added difficulty of a powerful existing video gaming industry, with gambling establishment operators, state-run lottery games and Native American tribes that are looking for to defend their turf.

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

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

"It will be a win-win for everybody, but it will be partnerships and it will be driven by technology," Mr Hawkley stated.
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'It will simply depend'
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Joe Asher, primary executive at William Hill US, is clear-eyed about the realities.

The business has been purchasing the US market considering that 2011, when it acquired 3 US firms to establish a presence in Nevada.
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William Hill now employs about 450 people in the US and has actually revealed partnerships with gambling establishments in Iowa and New Jersey.

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

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

"We definitely plan to have a really considerable brand name presence in New Jersey," he said. "In other states, it will just depend upon guideline and possibly who our local partner is."

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

US judgment opens method for sports betting