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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 city

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

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

Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.

The changes are the first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting wagering.

The industry sees a "once in a generation" chance to establish a brand-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 competition and harder rules from UK regulators, the timing is particularly suitable.

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But the industry says counting on the US remains a dangerous bet, as UK companies deal with complicated state-by-state regulation and competitors from established local interests.

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

'Take time'

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

Firms are hoping to use more of that activity after last month's choice, which struck down a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting.

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

That is anticipated to cause significant variation in how firms get accredited, where can occur, and which occasions are open to speculation - with big implications for the size of the market.

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

"There was a lot of 'this is going to be big'", stated 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 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 in some kind by 2023, producing a market with about $6bn in annual earnings.

But bookmakers deal with a far different landscape in America than they do in the UK, where wagering stores are a regular sight.

US laws restricted gambling mainly to Native American lands and Nevada's Las Vegas strip till fairly recently.

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

States have actually likewise been slow to legalise numerous forms of online gambling, despite a 2011 Justice Department opinion that appeared to remove challenges.

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

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

Now a specialist, he says UK companies should approach the market carefully, choosing partners with caution and avoiding mistakes that might cause regulator backlash.

"This is an opportunity for the American sports betting bettor ... I'm not exactly sure whether it is a chance for service," he says. "It truly depends on the result of [state] legislation and how the organization operators pursue the opportunity."

'It will be collaborations'

As legalisation starts, sports betting firms are lobbying to fend off high tax rates, as well as demands by US sports betting leagues, which wish to gather a portion of income as an "integrity charge".

International companies face the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lottos and Native American people that are looking for to safeguard their grass.

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

They indicate SBTech's recent statement that it is supplying 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 everybody, however it will be collaborations and it will be driven by innovation," Mr Hawkley stated.

'It will simply depend'

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

The company has actually been purchasing the US market considering that 2011, when it bought three US companies to establish a presence in Nevada.

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

It works as danger supervisor for the Delaware Lottery and has actually invested millions along with a regional developer in a New Jersey horse racing track.

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

"We certainly plan to have an extremely considerable brand name presence in New Jersey," he stated. "In other states, it will simply depend upon policy 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 happen on the first day."

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