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UK wagering firms gamble on US after sports betting wager judgment
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, on sports betting entered into result in Delaware, a small east coast state about two 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 method for states to allow sports betting.

The industry sees a "once in a generation" chance to develop a new market in sports betting-mad America, said Dublin-based monetary analyst David Jennings, who heads leisure research study at Davy.

For UK companies, which are coming to grips with consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is particularly suitable.
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But the market states counting on the US stays a dangerous bet, as UK companies face complex state-by-state policy and competition from entrenched regional interests.

"It's something that we're actually focusing on, however similarly we don't wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently bought the US dream sports betting website FanDuel.

'Take time'

The US represented about 23% of the world's $244bn (₤ 182bn) in gaming revenue in 2015, according to a report by Technavio, external published in January.

Firms are wishing to use more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a couple of others from authorising sports betting wagering.

The judgment found 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 expected to cause substantial variation in how companies get licensed, where sports betting can take place, and which occasions are open to speculation - with big implications for the size of the market.

Potential revenue varieties from $4.2 bn to nearly $20bn annually depending upon 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 huge'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he said: "I think the majority of people ... 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 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 kind by 2023, producing a market with about $6bn in annual profits.

But bookies face a far various landscape in America than they carry out 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 up until reasonably recently.

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

States have actually likewise been sluggish to legalise many forms of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to get rid of challenges.

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

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

Now a specialist, he says UK companies must approach the market carefully, selecting partners with care and avoiding errors that could result in regulator reaction.

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

'It will be collaborations'

As legalisation begins, sports betting companies are lobbying to fend off high tax rates, along with requests by US sports betting leagues, which wish to gather a portion of profits as an "integrity cost".

International business face the included challenge of a powerful existing video gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to protect their turf.

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

They indicate SBTech's current announcement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals most 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 stated.

'It will just depend'

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

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

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

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

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

"We definitely mean to have an extremely considerable brand name presence in New Jersey," he stated. "In other states, it will just depend on guideline and potentially who our regional partner is."

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

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