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UK wagering firms bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business press reporter, New York

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

From Tuesday, new rules on wagering came into 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 very 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 "when in a generation" chance to establish a 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 facing consolidation, increased online competitors and harder guidelines from UK regulators, the timing is especially appropriate.

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But the industry states counting on the US stays a risky bet, as UK companies face complicated state-by-state policy and competition from entrenched local interests.

"It's something that we're truly focusing on, however similarly we don't wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently bought the US fantasy sports betting site FanDuel.

'Require time'

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

Firms are wishing to take advantage of more of that activity after last month's decision, which overruled a 1992 federal law that barred states beyond Nevada and a few others from authorising sports betting.

The judgment discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to local legislators.

That is anticipated to lead to substantial variation in how companies get certified, where sports betting can happen, and which occasions are open to speculation - with big implications for the size of the marketplace.

Potential income varieties from $4.2 bn to nearly $20bn annually depending on elements like the number of states transfer to legalise, Oxford Economics estimated in a 2017 research 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 think many people ... are taking a look at this as, 'it's a chance 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, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in annual revenue.

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

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

In the popular creativity, 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 types of online gambling, despite a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting is normally viewed in its own classification, "it plainly stays to be seen whether it gets the sort of momentum individuals think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

David Carruthers is the former primary executive of BetonSports, who was arrested in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a consultant, he states UK companies must approach the market thoroughly, selecting partners with care and preventing mistakes that might cause regulator backlash.

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

'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 wish to gather a percentage of income as an "stability fee".

International companies face the added challenge of an effective existing gaming industry, with gambling establishment operators, state-run lottos and Native American people that are looking for to safeguard their turf.

Analysts say UK companies will require to strike partnerships, using their knowledge and technology in order to make inroads.

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

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

'It will just depend'

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

The business has been purchasing the US market given that 2011, when it bought 3 US companies to establish an existence in Nevada.

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

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

Mr Asher said William Hill has ended up being a household name in Nevada however that's not always the goal all over.

"We definitely intend to have a very considerable brand presence in New Jersey," he stated. "In other states, it will just depend on guideline and potentially who our local partner is."

"The US is going to be the most significant sports betting market worldwide," he included. "Obviously that's not going to take place on the first day."

More on this story

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