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UK sports betting companies gamble 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 entered effect in Delaware, a tiny 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 enable sports betting wagering.

The industry sees a "once in a generation" chance to establish a 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 grappling with consolidation, increased online competition and tougher guidelines from UK regulators, the timing is particularly opportune.

Why the betting industry deals with an uncertain future

How does unlawful sports betting wagering work and what are the worries?

But the market states counting on the US stays a risky bet, as UK business deal with complex state-by-state policy and competitors from established local interests.
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"It's something that we're truly focusing on, however similarly we do not want to overhype it," said James Midmer, representative at Paddy Power Betfair, which recently acquired the US dream sports betting site FanDuel.

'Take some time'

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

Firms are wanting to take advantage of more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states outside of Nevada and a couple of others from authorising sports betting wagering.
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The judgment 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 cause in how firms get licensed, where sports betting can occur, and which occasions are open to speculation - with huge ramifications for the size of the market.

Potential profits ranges from $4.2 bn to almost $20bn annually depending on factors like the number of states transfer to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

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

Now, he said: "I think many individuals ... are taking a look 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, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some form by 2023, producing a market with about $6bn in yearly earnings.

But bookmakers deal with a far various landscape in America than they do in the UK, where sports betting shops are a frequent sight.

US laws limited gambling mainly to Native American lands and Nevada's Las Vegas strip until relatively recently.

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

States have actually also been sluggish to legalise numerous kinds of online gaming, despite a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

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

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

Now an expert, he states UK firms ought to approach the market thoroughly, choosing partners with care and preventing errors that could lead to regulator backlash.

"This is a chance for the American sports betting wagerer ... I'm not exactly sure whether it is a chance for service," he states. "It truly is reliant on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be collaborations'

As legalisation starts, sports betting firms are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which desire to collect a percentage of revenue as an "stability charge".

International business deal with the included challenge of an effective existing video gaming industry, with gambling establishment operators, state-run lottery games and Native American people that are seeking to protect their grass.

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

They indicate SBTech's recent statement that it is offering 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 everyone, but it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will just depend'

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

The company has actually been investing in the US market considering that 2011, when it purchased 3 US companies to establish an existence in Nevada.

William Hill now utilizes about 450 people in the US and has announced partnerships with casinos in Iowa and New Jersey.

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

Mr Asher stated William Hill has ended up being a home name in Nevada however that's not necessarily the objective all over.

"We definitely mean to have a very considerable brand presence in New Jersey," he stated. "In other states, it will simply depend on policy and possibly who our local partner is."

"The US is going to be the most significant sports betting wagering market in the world," he included. "Obviously that's not going to occur on day one."

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