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UK sports betting firms gamble 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, new guidelines on sports betting entered result in Delaware, a tiny east coast state about two hours from Washington.

Neighbouring New Jersey might start 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 method for states to enable sports betting wagering.

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

For UK companies, which are coming to grips with combination, increased online competition and harder guidelines from UK regulators, the timing is particularly appropriate.

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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 established regional interests.

"It's something that we're really focusing on, however equally we don't desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently bought the US fantasy sports betting site FanDuel.

'Take time'

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

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

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 concern to regional lawmakers.

That is anticipated to cause considerable variation in how companies get licensed, where sports betting wagering can take place, and which events are open to speculation - with huge implications for the size of the market.

Potential revenue varieties from $4.2 bn to practically $20bn yearly depending on aspects like the number of states move to legalise, Oxford Economics approximated 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 experts KPMG.

Now, he said: "I believe the majority of 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 some time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in yearly earnings.

But bookies face a far various landscape in America than they carry out in the UK, where sports betting stores are a regular sight.

US laws restricted gaming largely to Native American lands and Nevada's Las Vegas strip up until fairly recently.

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

States have actually also been sluggish to legalise many forms of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to get rid of challenges.
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While sports betting is typically viewed in its own classification, "it clearly stays to be seen whether it gets the kind of momentum people 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 former president of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a consultant, he says UK firms must approach the market carefully, choosing partners with care and avoiding errors that could result in regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, along with requests by US sports betting leagues, which desire to collect a percentage of income as an "stability cost".

International companies face the included difficulty of a powerful existing video gaming market, with casino operators, state-run lottos and Native American tribes that are seeking to protect their turf.

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

They point to SBTech's current announcement that it is providing 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 everybody, but it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

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

The business has been purchasing the US market because 2011, when it purchased three US companies to develop an existence in Nevada.

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

It works as threat manager for the Delaware Lottery and has invested millions alongside a local designer 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 objective all over.

"We definitely mean to have a very considerable brand existence in New Jersey," he said. "In other states, it will just depend upon guideline and possibly who our local partner is."
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"The US is going to be the most significant sports betting market worldwide," he added. "Obviously that's not going to take place on day one."

US judgment opens method for sports betting wagering
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