UK sports betting firms bet on US after sports betting wager ruling
5 June 2018
By Natalie Sherman
Business reporter, New York
It's high stakes for UK firms as starts to spread out in America.
From Tuesday, new guidelines on sports betting came into impact in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey might start accepting sports betting bets as early as Friday.
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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 enable sports betting.
The market sees a "when in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based monetary analyst David Jennings, who heads leisure research at Davy.
For UK firms, which are coming to grips with debt consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is especially appropriate.
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But the market states counting on the US remains a dangerous bet, as UK companies face complex state-by-state guideline and competition from established regional interests.
"It's something that we're actually concentrating on, however similarly we don't desire to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently bought the US fantasy sports betting site FanDuel.
'Take some time'
The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income in 2015, according to a report by Technavio, external published in January.
Firms are hoping 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 few others from authorising sports betting wagering.
The ruling 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 regional legislators.
That is expected to cause substantial variation in how companies get certified, where sports betting wagering can take place, and which occasions are open to speculation - with huge implications for the size of the marketplace.
Potential revenue ranges from $4.2 bn to nearly $20bn each year depending upon elements like the number of states move to legalise, Oxford Economics estimated 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 experts KPMG.
Now, he stated: "I believe 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 require time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some type by 2023, developing a market with about $6bn in yearly revenue.
But bookies deal with a far various landscape in America than they perform in the UK, where wagering stores are a frequent sight.
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US laws limited gambling mostly to Native American lands and Nevada's Las Vegas strip till reasonably recently.
In the popular creativity, sports betting wagering has long been connected to a 1919 baseball World Series match-fixing scandal.
States have also been sluggish to legalise many kinds of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to remove barriers.
While sports betting wagering is typically seen in its own classification, "it plainly remains to be seen whether it gets the kind of momentum people think 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 apprehended in the US in 2006 for running an overseas online sportsbook and served prison time.
Now an expert, he says UK companies need to approach the marketplace thoroughly, selecting partners with caution and preventing bad moves that might result in regulator backlash.
"This is an opportunity for the American sports betting bettor ... I'm not exactly sure whether it is an opportunity for organization," he states. "It actually is reliant on the result of [state] legislation and how the organization operators pursue the opportunity."
'It will be partnerships'
As legalisation starts, sports betting wagering firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which want to gather a percentage of income as an "integrity fee".
International companies deal with the added obstacle of a powerful existing video gaming market, with gambling establishment operators, state-run lotteries and Native American people that are seeking to defend their grass.
Analysts say UK companies will need to strike collaborations, offering their knowledge and technology in order to make inroads.
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They point to SBTech's recent statement that it is providing 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, however it will be collaborations and it will be driven by technology," Mr Hawkley said.
'It will simply depend'
Joe Asher, president at William Hill US, is clear-eyed about the truths.
The company has actually been purchasing the US market since 2011, when it acquired three US companies to establish a presence in Nevada.
William Hill now uses about 450 individuals in the US and has announced partnerships with gambling establishments in Iowa and New Jersey.
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It works as threat supervisor for the Delaware Lottery and has actually invested millions alongside a local developer in a New Jersey horse racing track.
Mr Asher stated William Hill has become a family name in Nevada however that's not necessarily the objective everywhere.
"We certainly intend to have an extremely considerable brand name presence in New Jersey," he said. "In other states, it will simply depend on policy and possibly who our local partner is."
"The US is going to be the biggest sports betting market worldwide," he added. "Obviously that's not going to take place on the first day."
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UK Betting Firms Gamble on uS After Sports Wager Ruling
charlenebegin edited this page 2024-12-18 10:48:06 +01:00