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UK sports betting firms bet on US after sports betting wager judgment
bet9ja.com
5 June 2018

By Natalie Sherman

Business reporter, New york city

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

From Tuesday, new guidelines on wagering entered into impact in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey could start accepting sports betting bets as early as Friday.

The modifications are the very first in what could become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting.

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

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

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But the market states relying on the US remains a risky bet, as UK business face complex state-by-state guideline and competitors from entrenched local interests.

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

'Take some time'

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

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

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

Potential earnings varieties from $4.2 bn to nearly $20bn yearly depending on factors like how many states relocate to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for consultants KPMG.

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

'Remains to be seen"

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

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

US laws minimal gaming mainly to Native American lands and Nevada's Las Vegas strip until fairly just recently.

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

States have likewise been slow to legalise many kinds of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

While sports betting is usually viewed in its own category, "it plainly remains 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 guideline.

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

Now a consultant, he says UK companies should approach the marketplace carefully, choosing partners with care and avoiding errors that might result in regulator reaction.

"This is a chance for the American sports betting gambler ... I'm not sure whether it is a chance for business," he says. "It actually depends on the result of [state] legislation and how the service operators pursue the chance."

'It will be collaborations'

As legalisation begins, sports betting firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of income as an "integrity charge".

International business face the added difficulty of a powerful existing gaming market, with casino operators, state-run lottos and Native American people that are looking for to safeguard their turf.
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Analysts say UK firms will require to strike partnerships, using their know-how and technology in order to make inroads.

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

"It will be a win-win for everybody, but it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

The company has been purchasing the US market considering that 2011, when it acquired 3 US firms to establish an existence in Nevada.

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

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

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

"We certainly plan to have a very substantial brand presence in New Jersey," he said. "In other states, it will just depend upon policy and potentially who our local partner is."

"The US is going to be the most significant sports betting market on the planet," he added. "Obviously that's not going to happen on the first day."

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