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UK sports betting 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 in America.

From Tuesday, new guidelines on sports betting came into result in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey could start 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 allow sports betting wagering.

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

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

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But the market states counting on the US remains a risky bet, as UK business deal with complicated state-by-state regulation and competitors from established regional interests.

"It's something that we're actually focusing on, but equally we don't desire to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which just recently bought the US fantasy sports betting website FanDuel.
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'Take some time'

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

Firms are intending to tap into more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting.

The judgment found the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that question to local lawmakers.

That is anticipated to cause considerable variation in how firms get accredited, where sports betting can take place, and which events are open to speculation - with big implications for the size of the marketplace.

Potential revenue ranges from $4.2 bn to almost $20bn every year depending on factors like how numerous states 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 huge'", stated Will Hawkley, London-based head of leisure for experts KPMG.

Now, he stated: "I think most 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, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting 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 sports betting shops are a frequent sight.

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

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

States have actually also been sluggish to legalise many kinds of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to eliminate challenges.

While sports betting wagering is usually viewed in its own category, "it clearly stays to be seen whether it gets the kind of momentum individuals believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

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

Now a specialist, he says UK companies ought to approach the market thoroughly, selecting partners with care and avoiding bad moves that might cause regulator backlash.

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

'It will be collaborations'

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

International companies deal with the included obstacle of a powerful existing gaming market, with casino operators, state-run lotteries and Native American tribes that are looking for to safeguard their turf.

Analysts state UK firms will need to strike collaborations, offering their competence and innovation in order to make inroads.

They point to SBTech's recent announcement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the sort 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 stated.

'It will just depend'

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

The company has actually been buying the US market considering that 2011, when it acquired three US companies to develop a presence in Nevada.

William Hill now employs about 450 individuals in the US and has actually announced 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 local designer 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 everywhere.

"We certainly intend to have a really considerable brand name existence in New Jersey," he said. "In other states, it will just depend upon guideline and possibly who our regional partner is."

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

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