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UK wagering firms 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 impact 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 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 America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.

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

Why the sports betting market deals with an uncertain future

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

But the industry states depending on the US remains a dangerous bet, as UK business face complicated state-by-state guideline and competitors from established local interests.
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"It's something that we're actually concentrating on, but similarly we do not wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.

'Take time'

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

Firms are hoping to take advantage of more of that activity after last month's decision, which overruled a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting.

The ruling discovered 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 substantial variation in how companies get licensed, where sports betting wagering can happen, and which occasions are open to speculation - with huge implications for the size of the marketplace.

Potential earnings ranges from $4.2 bn to practically $20bn yearly depending upon elements like how numerous 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 substantial'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I think a lot of individuals ... 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 take some time'."

'Remains to be seen"

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

But bookies deal with a far various landscape in America than they do in the UK, where wagering stores are a frequent sight.

US laws minimal sports betting largely to Native American lands and Nevada's Las Vegas strip till reasonably just recently.

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

States have also been slow to legalise lots of forms of online gambling, in spite of a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

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

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

Now a consultant, he says UK companies ought to approach the market thoroughly, picking partners with care and preventing missteps that might cause regulator reaction.

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

'It will be collaborations'
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As legalisation starts, sports betting companies are lobbying to fend off high tax rates, as well as demands by US sports betting leagues, which wish to gather a percentage of revenue as an "stability charge".

International business deal with the added challenge of a powerful existing gaming market, with casino operators, state-run lotteries and Native American tribes that are seeking to defend their grass.

Analysts state UK firms will need to strike partnerships, using their proficiency and innovation in order to make inroads.

They indicate SBTech's recent announcement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the type of deals most likely to materialise.

"It will be a win-win for everyone, however it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

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

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

William Hill now employs about 450 people in the US and has actually revealed partnerships with gambling establishments in Iowa and New Jersey.

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

Mr Asher said William Hill has actually become a home name in Nevada however that's not necessarily the objective everywhere.

"We definitely mean to have a very considerable brand name existence in New Jersey," he said. "In other states, it will just depend upon regulation and potentially who our local partner is."

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

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