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UK wagering 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 city

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

From Tuesday, brand-new guidelines on wagering entered impact in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey could start accepting sports betting bets as early as Friday.
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The modifications 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 permit sports betting wagering.

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

For UK companies, which are coming to grips with combination, increased online competitors and harder rules from UK regulators, the timing is particularly suitable.

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But the market states relying on the US remains a risky bet, as UK business deal with complicated state-by-state guideline and competition from entrenched regional interests.

"It's something that we're actually focusing on, but equally we do not wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which just recently acquired the US fantasy sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits in 2015, 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 struck down a 1992 federal law that barred states beyond 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, leaving that question to regional lawmakers.

That is anticipated to cause significant variation in how companies get licensed, where sports betting wagering can happen, and which events are open to speculation - with huge ramifications for the size of the marketplace.

Potential earnings ranges from $4.2 bn to nearly $20bn yearly depending on aspects like how many states relocate to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I think many people ... are taking a look 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, anticipates that 32 states will legalise sports betting wagering in some type by 2023, producing a market with about $6bn in yearly income.

But bookies face a far various landscape in America than they carry out in the UK, where wagering stores are a regular sight.

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

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

States have actually also been sluggish to legalise numerous types of online sports betting, in spite of a 2011 Justice Department opinion that appeared to eliminate challenges.

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

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

Now a consultant, he says UK companies must approach the marketplace thoroughly, picking partners with caution and avoiding mistakes that could result in regulator backlash.
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"This is an opportunity for the American sports betting gambler ... I'm not sure whether it is an opportunity for business," he states. "It truly is dependent on the outcome of [state] legislation and how business operators pursue the chance."

'It will be collaborations'
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As legalisation begins, sports betting companies are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which wish to collect a percentage of revenue as an "stability fee".

International companies face the included difficulty of a powerful existing gaming market, with gambling establishment operators, state-run lotteries and Native American people that are seeking to protect their turf.

Analysts state UK companies will require to strike partnerships, using their expertise and innovation in order to make inroads.

They indicate SBTech's current statement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the kind of offers 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 said.

'It will simply depend'

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

The business has been purchasing the US market since 2011, when it purchased three US companies to establish an existence in Nevada.

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

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

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

"We definitely mean to have a really considerable brand name presence in New Jersey," he stated. "In other states, it will simply depend upon regulation and potentially who our regional partner is."

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

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