UK sports betting firms gamble on US after sports betting wager judgment
bet9ja.com
5 June 2018
bet9ja.com
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, new guidelines on sports betting entered result in Delaware, a small 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 could end up being a wave of legalisation after the Supreme Court last month cleared the way for states to sports betting.

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

For UK firms, which are coming to grips with debt consolidation, increased online competition and harder rules from UK regulators, the timing is especially suitable.

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But the industry says counting on the US remains a risky bet, as UK companies face complex state-by-state guideline and competitors from established local interests.

"It's something that we're actually focusing on, but equally we don't want to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.

'Take time'

The US accounted for 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 wanting to take advantage of more of that activity after last month's choice, which struck down a 1992 federal law 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 actually legalise sports betting wagering, leaving that question to regional lawmakers.

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

Potential earnings ranges from $4.2 bn to practically $20bn annually 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 huge'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I believe many people ... are taking a look 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, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some type by 2023, creating a market with about $6bn in annual earnings.

But bookies deal with a far different landscape in America than they perform in the UK, where sports betting shops are a frequent sight.
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US laws limited gaming largely to Native American lands and Nevada's Las Vegas strip up until reasonably recently.

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

States have actually also been slow to legalise numerous types of online gaming, in spite of a 2011 Justice Department opinion that appeared to remove barriers.

While sports betting is normally seen in its own classification, "it clearly stays to be seen whether it gets the sort of momentum individuals think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.
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David Carruthers is the former chief executive of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a consultant, he states UK companies ought to approach the marketplace thoroughly, picking partners with care and preventing bad moves that could lead to regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting wagering firms are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which wish to gather a portion of earnings as an "stability fee".

International business deal with the included challenge of an effective existing video gaming market, with casino operators, state-run lotteries and Native American tribes that are seeking to safeguard their turf.

Analysts say UK companies will require to strike collaborations, offering their know-how and innovation in order to make inroads.

They point to SBTech's recent statement that it is providing technology 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 said.

'It will just depend'

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

The company has been purchasing the US market given that 2011, when it purchased 3 US firms to develop an existence in Nevada.

William Hill now uses about 450 people in the US and has actually revealed collaborations with gambling establishments in Iowa and New Jersey.

It works as danger manager for the Delaware Lottery and has actually invested millions together with a local designer in a New Jersey horse racing track.

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

"We definitely mean to have an extremely considerable brand presence in New Jersey," he said. "In other states, it will just depend on regulation and possibly who our local partner is."

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

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