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UK wagering companies bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

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

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

Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.

The modifications are the very 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 industry sees a "as soon as in a generation" opportunity to develop a new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research study at Davy.

For UK companies, which are coming to grips with combination, increased online competitors and harder rules from UK regulators, the timing is especially appropriate.

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But the market states relying on the US remains a risky bet, as UK business deal with complex state-by-state policy and competition from entrenched regional interests.

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

'Take some time'

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

Firms are intending to take advantage of more of that activity after last month's decision, which overruled a 1992 federal law that barred states outside of Nevada and a couple of 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, leaving that question to .

That is anticipated to cause considerable variation in how companies get accredited, where sports betting wagering can happen, and which events are open to speculation - with big implications for the size of the market.

Potential earnings varieties from $4.2 bn to almost $20bn every year depending on elements like the number of states move to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

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

Now, he said: "I think the majority of people ... are taking a look at this as, 'it's a chance but 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, predicts that 32 states will legalise sports betting wagering in some kind by 2023, developing a market with about $6bn in annual earnings.

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

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

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

States have also been sluggish to legalise many types of online sports betting, despite a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting wagering is normally seen in its own category, "it clearly remains to be seen whether it gets the kind of momentum people believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting guideline.

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

Now a specialist, he states UK firms must approach the market carefully, picking partners with caution and avoiding mistakes that might result in regulator backlash.

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

'It will be collaborations'

As legalisation begins, sports betting companies are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which wish to collect a percentage of revenue as an "integrity cost".

International business deal with the included obstacle of a powerful existing gaming market, with gambling establishment operators, state-run lotteries and Native American tribes that are looking for to protect their turf.

Analysts say UK firms will need to strike partnerships, using their competence and innovation in order to make inroads.

They point to SBTech's current statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the kind of offers most likely to materialise.
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"It will be a win-win for everyone, however it will be partnerships and it will be driven by innovation," Mr Hawkley stated.

'It will just depend'

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

The company has actually been purchasing the US market considering that 2011, when it bought 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 gambling establishments in Iowa and New Jersey.

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

Mr Asher stated William Hill has actually become a household name in Nevada however that's not necessarily the objective all over.

"We definitely plan to have an extremely substantial brand existence in New Jersey," he said. "In other states, it will simply depend on guideline and possibly who our local partner is."

"The US is going to be the greatest sports betting wagering market in the world," he included. "Obviously that's not going to happen on the first day."

More on this story

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14 May 2018

Paddy Power buys fantasy sports betting website

23 May 2018
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