UK wagering firms bet on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business reporter, New York

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

From Tuesday, brand-new guidelines on wagering entered into effect in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey might start accepting sports betting bets as early as Friday.
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The changes are the first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.
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The industry sees a "as soon as in a generation" chance to develop a brand-new market in sports betting-mad America, stated Dublin-based monetary analyst David Jennings, who heads leisure research at Davy.

For UK firms, which are facing combination, increased online competitors and harder rules from UK regulators, the timing is especially .

Why the gaming industry faces an uncertain future
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How does unlawful sports betting wagering work and what are the worries?

But the market states relying on the US stays a dangerous bet, as UK business deal with complicated state-by-state regulation and competitors from entrenched regional interests.

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

The US represented 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 wishing to take advantage of more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states beyond 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 legislators.

That is anticipated to cause significant variation in how firms get licensed, where sports betting wagering can take place, and which occasions are open to speculation - with big implications for the size of the marketplace.

Potential income ranges from $4.2 bn to almost $20bn annually depending upon aspects like the number of states transfer to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

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

Now, he said: "I think the majority of people ... 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 take some time'."

'Remains to be seen"
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Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some kind by 2023, creating a market with about $6bn in yearly earnings.

But bookmakers face a far different landscape in America than they do in the UK, where wagering shops are a regular sight.

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

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

States have actually also been slow to legalise lots of types of online sports betting, despite a 2011 Justice Department viewpoint that appeared to get rid of obstacles.

While sports betting is typically viewed in its own classification, "it clearly stays to be seen whether it gets the type of momentum people think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering guideline.
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David Carruthers is the former president of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served prison time.
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Now an expert, he states UK firms need to approach the marketplace thoroughly, selecting partners with care and preventing mistakes that could lead to regulator reaction.

"This is a chance for the American sports betting gambler ... I'm not sure whether it is an opportunity for business," he says. "It truly is reliant on the result of [state] legislation and how the organization operators pursue the chance."

'It will be partnerships'

As legalisation starts, sports betting firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to gather a portion of income as an "stability fee".

International business face the added difficulty of a powerful existing video gaming market, with gambling establishment operators, state-run lottery games and Native American tribes that are seeking to safeguard their turf.

Analysts say UK firms will require to strike partnerships, providing their competence and technology in order to make inroads.

They indicate SBTech's recent announcement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind of deals 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 just depend'

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

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

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

It works as danger supervisor for the Delaware Lottery and has actually invested millions alongside a local designer in a New Jersey horse racing track.

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

"We certainly plan to have an extremely substantial brand name 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 biggest sports betting market on the planet," he included. "Obviously that's not going to take place on the first day."

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