UK sports betting companies gamble on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business reporter, New york city

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

From Tuesday, new rules on sports betting came into effect in Delaware, a coast state about two hours from Washington.
bet9ja.com
Neighbouring New Jersey might begin accepting sports betting bets as early as Friday.

The changes are the first in what could end up being a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting.

The industry sees a "as soon as in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based financial analyst David Jennings, who heads leisure research at Davy.

For UK firms, which are grappling with combination, increased online competitors and tougher guidelines from UK regulators, the timing is particularly appropriate.

Why the gambling market faces an unsure future

How does illegal sports betting work and what are the fears?

But the industry states depending on the US stays a risky bet, as UK business deal with complicated state-by-state regulation and competition from entrenched regional interests.

"It's something that we're really focusing on, however equally we don't want to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which 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 income last year, according to a report by Technavio, external released in January.

Firms are hoping to use more of that activity after last month's decision, which overruled a 1992 federal law that barred states beyond Nevada and a few 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, leaving that question to local lawmakers.

That is anticipated to lead to significant variation in how firms get accredited, where sports betting can take place, and which occasions are open to speculation - with big ramifications for the size of the market.

Potential profits varieties from $4.2 bn to nearly $20bn yearly depending on factors like the number of states relocate 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 substantial'", said Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he said: "I think many 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, predicts that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in yearly earnings.

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

US laws minimal sports betting largely to Native American lands and Nevada's Las Vegas strip up until fairly recently.

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

States have likewise been slow to legalise many forms of online sports betting, despite a 2011 Justice Department opinion that appeared to eliminate challenges.

While sports betting wagering is normally viewed in its own classification, "it plainly remains to be seen whether it gets the sort of momentum individuals believe it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting regulation.

David Carruthers is the previous president of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served prison time.

Now an expert, he states UK firms ought to approach the marketplace carefully, choosing partners with care and preventing bad moves that might cause regulator backlash.

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

'It will be partnerships'

As legalisation starts, sports betting wagering companies are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which wish to gather a percentage of income as an "integrity fee".

International companies face the added difficulty of a powerful existing video gaming industry, with casino operators, state-run lottos and Native American tribes that are looking for to safeguard their turf.

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

They indicate SBTech's current announcement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the type of offers most likely to materialise.

"It will be a win-win for everybody, however it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

Joe Asher, president at William Hill US, is clear-eyed about the truths.
bet9ja.com
The business has actually been buying the US market because 2011, when it purchased three US companies to develop an existence in Nevada.

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

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

Mr Asher stated William Hill has ended up being a family name in Nevada but that's not always the goal all over.

"We certainly mean to have an extremely significant brand name existence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our regional partner is."

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

More on this story

US judgment opens method for sports betting

14 May 2018

Paddy Power buys fantasy sports betting website

23 May 2018
bit.ly