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UK wagering firms gamble on US after sports betting wager ruling
bet9ja.com
5 June 2018
bit.ly
By Natalie Sherman

Business press reporter, New York

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

From Tuesday, new guidelines on wagering came into effect 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 modifications are the first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting.

The market sees a "once in a generation" chance to develop a brand-new market in sports betting-mad America, said analyst David Jennings, who heads leisure research at Davy.

For UK firms, which are grappling with debt consolidation, increased online competitors and harder rules from UK regulators, the timing is particularly appropriate.

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

"It's something that we're actually concentrating on, however equally we don't desire to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which just recently acquired the US dream sports betting website FanDuel.

'Take time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits 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 decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting.

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 local legislators.

That is expected to cause considerable variation in how firms get licensed, where sports betting can happen, and which occasions are open to speculation - with big ramifications for the size of the market.

Potential revenue ranges from $4.2 bn to almost $20bn annually depending on aspects like how numerous states transfer 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 experts 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, predicts that 32 states will legalise sports betting in some kind by 2023, producing a market with about $6bn in annual earnings.

But bookies face a far different landscape in America than they do in the UK, where sports betting stores are a regular sight.

US laws limited gaming mostly to Native American lands and Nevada's Las Vegas strip till reasonably just recently.

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

States have likewise been slow to legalise numerous kinds of online gambling, regardless of a 2011 Justice Department opinion that appeared to eliminate barriers.

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

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

Now a specialist, he says UK firms must approach the market carefully, selecting partners with care and preventing missteps that could lead to regulator backlash.

"This is a chance for the American sports betting bettor ... I'm uncertain whether it is a chance for company," he says. "It actually depends on the result of [state] legislation and how business operators pursue the opportunity."

'It will be collaborations'

As legalisation starts, sports betting companies are lobbying to ward off high tax rates, along with requests by US sports betting leagues, which desire to gather a percentage of income as an "stability cost".

International companies face the included challenge of an effective existing gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to protect their grass.

Analysts state UK companies will need to strike collaborations, offering their knowledge and technology in order to make inroads.

They indicate SBTech's current statement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the type of deals most likely to materialise.

"It will be a win-win for everyone, however it will be collaborations and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

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

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

It works as threat manager for the Delaware Lottery and has actually invested millions along with a regional 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 all over.

"We certainly mean to have a really significant brand presence 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 market in the world," he included. "Obviously that's not going to take place on the first day."

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