UK wagering firms bet on US after sports betting wager judgment

5 June 2018

By Natalie Sherman
bit.ly
Business reporter, New York

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

From Tuesday, brand-new rules on sports betting entered into effect in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey might start accepting sports betting bets as early as Friday.

The changes are the first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting wagering.

The market sees a "as soon as in a generation" opportunity to establish a in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research at Davy.

For UK companies, which are facing combination, increased online competition and tougher rules from UK regulators, the timing is particularly opportune.

Why the gaming market deals with an uncertain future

How does unlawful sports betting wagering work and what are the worries?
bit.ly
But the market says depending on the US stays a risky bet, as UK companies face complicated state-by-state guideline and competitors from established local interests.

"It's something that we're actually focusing on, however similarly we do not wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently bought the US fantasy sports betting website FanDuel.
bit.ly
'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming revenue in 2015, according to a report by Technavio, external published in January.

Firms are hoping to take advantage of more of that activity after last month's choice, which overruled a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting wagering.

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

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

Potential earnings varieties from $4.2 bn to nearly $20bn each year depending on factors like how lots of states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

"There was a great deal of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he stated: "I think most people ... are looking 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, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some form by 2023, developing a market with about $6bn in yearly earnings.

But bookies face a far various landscape in America than they carry out in the UK, where sports betting stores are a frequent sight.

US laws restricted sports betting mostly to Native American lands and Nevada's Las Vegas strip until reasonably recently.

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

States have also been sluggish to legalise many kinds of online gambling, despite a 2011 Justice Department viewpoint that appeared to get rid of barriers.
bet9ja.com
While sports betting wagering is generally seen in its own classification, "it clearly stays to be seen whether it gets the sort of momentum people think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering policy.

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

Now a consultant, he says UK companies need to approach the market thoroughly, selecting partners with care and avoiding errors that might result in regulator backlash.

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

'It will be partnerships'

As legalisation starts, 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 "stability charge".

International companies deal with the included obstacle of an effective existing gaming market, with casino operators, state-run lottery games and Native American people that are seeking to safeguard their turf.

Analysts say UK companies will require to strike collaborations, providing their know-how and innovation 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, but it will be collaborations and it will be driven by innovation," Mr Hawkley said.

'It will just depend'

Joe Asher, president at William Hill US, is clear-eyed about the truths.

The company has been buying the US market given that 2011, when it acquired three US firms to establish an existence in Nevada.

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

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

Mr Asher said William Hill has actually become a household name in Nevada however that's not necessarily the goal everywhere.

"We certainly mean to have a very significant brand name presence in New Jersey," he stated. "In other states, it will just depend upon regulation and potentially who our regional partner is."
bit.ly
"The US is going to be the most significant sports betting market worldwide," he added. "Obviously that's not going to happen on the first day."

More on this story

US ruling opens method for sports betting

14 May 2018

Paddy Power buys dream sports betting site

23 May 2018