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UK sports betting companies bet on US after sports betting wager judgment
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5 June 2018
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By Natalie Sherman

Business reporter, New York

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

From Tuesday, brand-new rules on wagering entered result in Delaware, a small east coast state about 2 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 way for states to allow sports betting wagering.

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

For UK companies, which are facing consolidation, increased online competitors and from UK regulators, the timing is particularly opportune.

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But the industry says depending on the US stays a dangerous bet, as UK business face complicated state-by-state regulation and competition from established regional interests.

"It's something that we're really focusing on, however equally we do not desire to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which recently bought the US dream sports betting site FanDuel.

'Require 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 published in January.

Firms are hoping to use more of that activity after last month's decision, which struck down a 1992 federal law that disallowed states outside of 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 actually legalise sports betting, leaving that question to regional lawmakers.

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

Potential revenue ranges from $4.2 bn to practically $20bn yearly depending on factors like the number of states relocate to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

"There was a great deal of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for experts KPMG.

Now, he stated: "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 require time'."

'Remains to be seen"

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

But bookmakers deal with a far different landscape in America than they carry out in the UK, where wagering shops are a frequent sight.

US laws restricted gaming mostly to Native American lands and Nevada's Las Vegas strip till relatively recently.
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In the popular imagination, sports betting wagering has actually long been linked 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 viewpoint that appeared to get rid of barriers.

While sports betting is usually seen in its own category, "it plainly stays to be seen whether it gets the type of momentum people think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering regulation.

David Carruthers is the previous president of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a specialist, he says UK firms should approach the marketplace thoroughly, choosing partners with care and avoiding errors that might cause regulator reaction.

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

'It will be collaborations'

As legalisation begins, sports betting companies are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which wish to gather a portion of income as an "integrity fee".

International business deal with the included challenge of an effective existing video gaming market, with gambling establishment operators, state-run lottos and Native American people that are seeking to defend their turf.

Analysts say UK companies will need to strike collaborations, using their proficiency and innovation in order to make inroads.

They indicate SBTech's recent statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers most likely to materialise.

"It will be a win-win for everybody, however 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 company has actually been buying the US market given that 2011, when it bought three US firms to develop a presence in Nevada.

William Hill now employs about 450 individuals in the US and has actually revealed partnerships with casinos in Iowa and New Jersey.

It works as threat supervisor for the Delaware Lottery and has actually invested millions along with a regional designer in a New Jersey horse racing track.

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

"We certainly intend to have a very significant brand presence in New Jersey," he said. "In other states, it will simply depend on regulation and potentially who our local partner is."

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

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