UK sports betting companies gamble on US after sports betting wager ruling
5 June 2018
By Natalie Sherman
Business reporter, New york city
It's high stakes for UK firms as sports betting starts to spread in America.
From Tuesday, new guidelines on wagering came into 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 very 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" chance to develop a brand-new market in sports betting-mad America, stated 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 especially suitable.
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But the industry states relying on the US remains a risky bet, as UK business face complex state-by-state policy and competitors from established local interests.
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"It's something that we're actually concentrating on, however similarly we do not wish to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which recently acquired 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 wanting to tap into more of that activity after last month's decision, which struck down a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.
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The judgment discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to regional legislators.
That is expected to result in significant variation in how companies get licensed, where sports betting wagering can occur, and which events are open to speculation - with huge implications for the size of the marketplace.
Potential profits ranges from $4.2 bn to almost $20bn each year depending upon aspects like the number of states move to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.
"There was a lot of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for specialists KPMG.
Now, he said: "I think many people ... 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 require time'."
'Remains to be seen"
Chris Grove, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some kind by 2023, developing a market with about $6bn in yearly profits.
But bookmakers deal with a far different landscape in America than they carry out in the UK, where sports betting stores are a frequent sight.
US laws restricted gaming largely to Native American lands and Nevada's Las Vegas strip till fairly just recently.
In the popular imagination, sports betting wagering has long been linked to a 1919 baseball World Series match-fixing scandal.
States have likewise been sluggish to legalise numerous forms of online betting, in spite of a 2011 Justice Department opinion that appeared to eliminate challenges.
While sports betting wagering is generally seen in its own category, "it plainly stays to be seen whether it gets the sort of momentum people 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 former president of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served prison time.
Now an expert, he states UK firms should approach the market carefully, selecting partners with caution and avoiding bad moves that could cause regulator backlash.
"This is an opportunity for the American sports betting gambler ... I'm not sure whether it is an opportunity for company," he states. "It really depends on the outcome of [state] legislation and how the company operators pursue the chance."
'It will be partnerships'
As legalisation begins, sports betting wagering firms are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which want to gather a portion of earnings as an "integrity fee".
International business deal with the included challenge of an effective existing video gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to defend their grass.
Analysts say UK firms will require to strike collaborations, providing their expertise and innovation in order to make inroads.
They indicate SBTech's recent statement that it is providing 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, but it will be and it will be driven by innovation," Mr Hawkley said.
'It will just depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the realities.
The company has actually been investing in the US market because 2011, when it acquired three US firms to develop a presence in Nevada.
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William Hill now employs about 450 individuals in the US and has actually revealed partnerships with gambling establishments in Iowa and New Jersey.
It works as threat supervisor for the Delaware Lottery and has invested millions along with a regional developer in a New Jersey horse racing track.
Mr Asher stated William Hill has actually become a home name in Nevada but that's not necessarily the goal all over.
"We definitely intend to have a really considerable brand name existence in New Jersey," he stated. "In other states, it will just depend on regulation and potentially who our local partner is."
"The US is going to be the biggest sports betting wagering market in the world," he added. "Obviously that's not going to happen on the first day."
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UK Betting Firms Gamble on United States After Sports Wager Ruling
carmenfarrow97 edited this page 2024-12-18 05:45:06 +01:00