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

Business reporter, New York

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

From Tuesday, new guidelines on wagering came into effect in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey might 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 method for states to permit sports betting.

The market sees a "once in a generation" chance to develop a new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research at Davy.

For UK companies, which are coming to grips with debt consolidation, increased online competition and tougher rules from UK regulators, the timing is particularly appropriate.

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But the market says counting on the US remains a risky bet, as UK companies deal with complex state-by-state regulation and competition from established regional interests.

"It's something that we're actually focusing on, however similarly we don't desire to overhype it," said James Midmer, representative at Paddy Power Betfair, which just recently purchased the US fantasy sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming earnings last year, according to a report by Technavio, external released in January.

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

The ruling found the law was an over-reach of federal power. But the court it did not really legalise sports betting wagering, leaving that concern to local lawmakers.

That is expected to result in substantial variation in how companies get accredited, where sports betting can occur, and which events are open to speculation - with huge implications for the size of the marketplace.

Potential profits varieties from $4.2 bn to practically $20bn each year depending on elements like the number of states transfer 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 consultants KPMG.

Now, he said: "I think many people ... are taking a look at this as, 'it's a chance however 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 wagering in some type by 2023, creating a market with about $6bn in yearly revenue.

But bookies face a far different landscape in America than they perform in the UK, where wagering shops are a frequent sight.

US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip until relatively just recently.

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

States have actually also been sluggish to legalise many kinds of online gambling, despite a 2011 Justice Department opinion that appeared to remove obstacles.

While sports betting wagering is typically viewed in its own classification, "it clearly stays to be seen whether it gets the kind of momentum people believe it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering policy.

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

Now a consultant, he says UK companies ought to approach the market thoroughly, choosing partners with caution and avoiding bad moves that could cause regulator backlash.

"This is an opportunity for the American sports betting gambler ... I'm unsure whether it is an opportunity for company," he says. "It really is reliant on the result of [state] legislation and how the service operators pursue the chance."

'It will be collaborations'

As legalisation starts, sports betting companies are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which wish to gather a portion of revenue as an "integrity charge".

International business face the added difficulty of a powerful existing gaming market, with casino operators, state-run lottery games and Native American people that are looking for to protect their grass.

Analysts say UK firms will require to strike partnerships, providing their competence and innovation 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 kind of deals most likely to materialise.

"It will be a win-win for everybody, but it will be collaborations and it will be driven by technology," Mr Hawkley said.

'It will simply depend'

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

The business has been buying the US market since 2011, when it bought 3 US firms to develop a presence in Nevada.

William Hill now utilizes about 450 people in the US and has revealed collaborations with casinos in Iowa and New Jersey.

It works as risk manager for the Delaware Lottery and has actually invested millions along with a local developer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually ended up being a home name in Nevada however that's not necessarily the goal all over.

"We definitely intend to have a very significant brand name existence in New Jersey," he stated. "In other states, it will just depend on policy and possibly who our is."

"The US is going to be the most significant sports betting market on the planet," he included. "Obviously that's not going to happen on the first day."

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