UK wagering companies bet on US after sports betting wager ruling
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5 June 2018
It's high stakes for UK companies as sports betting wagering starts to spread out in America.
From Tuesday, new guidelines on wagering came into effect in Delaware, a tiny east coast state about 2 hours from Washington.
Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.
The changes are the first in what might 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 "once in a generation" opportunity to develop a brand-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 facing consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is especially opportune.
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But the market says depending on the US stays a dangerous bet, as UK companies deal with complicated state-by-state policy and competitors from established regional interests.
"It's something that we're actually focusing on, but equally we do not desire to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which just recently purchased the US fantasy sports betting website FanDuel.
'Take some time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming income last year, according to a report by Technavio, external published in January.
Firms are hoping to tap into more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states outside of Nevada and a couple of 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 legislators.
That is expected to lead to significant variation in how companies get licensed, where sports betting wagering can take place, and which occasions are open to speculation - with huge implications for the size of the market.
Potential revenue varieties from $4.2 bn to nearly $20bn yearly depending on elements like how lots of states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.
"There was a great deal of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for experts KPMG.
Now, he said: "I think many people ... are taking a look at this as, 'it's a chance 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'."
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'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some type by 2023, creating a market with about $6bn in annual revenue.
But bookies deal with a far various landscape in America than they carry out in the UK, where wagering stores are a regular sight.
US laws minimal sports betting largely to Native American lands and Nevada's Las Vegas strip until fairly 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 lots of forms of online sports betting, in spite of a 2011 Justice Department opinion that appeared to remove obstacles.
While sports betting wagering is usually seen in its own category, "it plainly stays to be seen whether it gets the type of believe it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.
David Carruthers is the previous president of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served prison time.
Now a specialist, he says UK companies ought to approach the marketplace carefully, choosing partners with caution and avoiding missteps that might cause regulator reaction.
"This is a chance for the American sports betting gambler ... I'm not exactly sure whether it is an opportunity for business," he says. "It truly is reliant on the result of [state] legislation and how the company operators pursue the opportunity."
'It will be partnerships'
As legalisation begins, sports betting wagering companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which want to gather a percentage of revenue as an "integrity fee".
International companies face the included difficulty of an effective existing video gaming market, with casino operators, state-run lottery games and Native American people that are seeking to protect their turf.
Analysts say UK firms will need to strike partnerships, using their know-how and technology in order to make inroads.
They indicate SBTech's current statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.
"It will be a win-win for everyone, but it will be collaborations and it will be driven by innovation," Mr Hawkley stated.
'It will just depend'
Joe Asher, president at William Hill US, is clear-eyed about the truths.
The business has actually been buying the US market considering that 2011, when it purchased 3 US companies to develop an existence in Nevada.
William Hill now uses about 450 individuals in the US and has actually announced partnerships with casinos in Iowa and New Jersey.
It works as danger manager for the Delaware Lottery and has actually invested millions along with a local designer in a New Jersey horse racing track.
Mr Asher said William Hill has become a family name in Nevada however that's not always the objective everywhere.
"We definitely mean to have a very substantial brand presence in New Jersey," he said. "In other states, it will simply depend upon guideline and possibly who our local partner is."
"The US is going to be the most significant sports betting market worldwide," he added. "Obviously that's not going to occur on the first day."
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UK Betting Firms Gamble on uS After Sports Wager Ruling
kgokimberley7 edited this page 2025-01-02 03:26:21 +01:00