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UK sports betting companies bet on US after sports betting wager ruling

5 June 2018
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It's high stakes for UK firms as sports betting starts to spread in America.

From Tuesday, brand-new rules on sports betting entered into impact 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 first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting wagering.

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

For UK companies, which are grappling with debt consolidation, increased online competitors and tougher rules from UK regulators, the timing is especially opportune.

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But the market says on the US stays a risky bet, as UK business face complex state-by-state guideline and competition from entrenched regional interests.

"It's something that we're actually concentrating on, however similarly we do not desire to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.

'Take some time'

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

Firms are hoping to tap into more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting wagering.

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

That is expected to lead to significant variation in how firms get certified, where sports betting wagering can happen, and which events are open to speculation - with huge implications for the size of the marketplace.

Potential profits varieties from $4.2 bn to nearly $20bn annually depending on elements like the number of states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.
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"There was a lot 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 looking 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 some time'."

'Remains to be seen"

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

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

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

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

States have actually likewise been slow to legalise many types of online sports betting, regardless of a 2011 Justice Department opinion that appeared to eliminate obstacles.

While sports betting wagering is generally viewed 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 teacher at Drake University and co-author of a book about sports betting wagering guideline.

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

Now an expert, he says UK firms must approach the marketplace thoroughly, picking partners with caution and avoiding mistakes that might cause regulator backlash.

"This is a chance for the American sports betting bettor ... I'm uncertain whether it is a chance for organization," he states. "It truly depends on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be partnerships'

As legalisation starts, sports betting wagering firms are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which want to collect a portion of income as an "stability charge".

International companies face the included difficulty of an effective existing gaming industry, with gambling establishment operators, state-run lottery games and Native American tribes that are seeking to safeguard their turf.

Analysts state UK firms will need to strike partnerships, providing their proficiency and technology in order to make inroads.

They indicate SBTech's recent statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the kind of offers 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, primary executive at William Hill US, is clear-eyed about the truths.

The business has been purchasing the US market because 2011, when it purchased 3 US companies to develop a presence in Nevada.

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

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

Mr Asher stated William Hill has become a home name in Nevada however that's not necessarily the goal everywhere.

"We certainly mean to have a very considerable brand name presence in New Jersey," he stated. "In other states, it will just depend upon policy and potentially who our regional partner is."

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

US judgment opens way for sports betting wagering
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