UK wagering companies bet on US after sports betting wager ruling
5 June 2018
By Natalie Sherman
Business reporter, New York
It's high stakes for UK companies as sports betting starts to spread in America.
From Tuesday, brand-new guidelines on wagering came into effect in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey could start accepting sports betting bets as early as Friday.
The changes are the very first in what might become a wave of legalisation after the Supreme Court last month cleared the way for states to enable sports betting wagering.
The market sees a "as soon as in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research at Davy.
For UK companies, which are grappling with combination, increased online competition and harder guidelines from UK regulators, the timing is especially opportune.
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But the market says depending on the US stays a dangerous bet, as UK companies deal with complex state-by-state guideline and competition from entrenched local interests.
"It's something that we're truly concentrating on, however equally we don't wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which just recently purchased the US dream sports betting website FanDuel.
'Take time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming profits in 2015, according to a report by Technavio, in January.
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Firms are intending to use more of that activity after last month's decision, 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 question to local legislators.
That is expected to lead to considerable variation in how firms get accredited, where sports betting wagering can happen, and which events are open to speculation - with huge implications for the size of the market.
Potential profits varieties from $4.2 bn to almost $20bn each year depending upon aspects like the number of states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.
"There was a lot of 'this is going to be substantial'", said Will Hawkley, London-based head of leisure for experts KPMG.
Now, he said: "I believe many 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 take some time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some type by 2023, creating a market with about $6bn in yearly earnings.
But bookies face a far various landscape in America than they perform in the UK, where wagering stores are a regular sight.
US laws limited gaming largely to Native American lands and Nevada's Las Vegas strip till fairly just recently.
In the popular creativity, sports betting has long been linked to a 1919 baseball World Series match-fixing scandal.
States have likewise been slow to legalise lots of kinds of online gaming, despite a 2011 Justice Department opinion that appeared to get rid of obstacles.
While sports betting wagering is usually viewed in its own category, "it plainly 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 guideline.
David Carruthers is the previous president of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served jail time.
Now a specialist, he says UK companies need to approach the marketplace carefully, picking partners with care and preventing missteps that could cause regulator reaction.
"This is an opportunity for the American sports betting gambler ... I'm uncertain whether it is an opportunity for organization," he says. "It truly depends on the result of [state] legislation and how business operators pursue the chance."
'It will be collaborations'
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As legalisation starts, sports betting firms are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which want to collect a percentage of earnings as an "stability fee".
International companies face the added obstacle of an effective existing gaming market, with gambling establishment operators, state-run lottery games and Native American people that are looking for to defend their turf.
Analysts state UK firms will need to strike partnerships, offering their proficiency and innovation 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 type of offers likely to materialise.
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"It will be a win-win for everyone, but 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 realities.
The business has actually been buying the US market given that 2011, when it acquired 3 US firms to develop a presence in Nevada.
William Hill now uses about 450 individuals in the US and has actually revealed partnerships with casinos in Iowa and New Jersey.
It works as danger supervisor for the Delaware Lottery and has actually invested millions together with a local designer in a New Jersey horse racing track.
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Mr Asher said William Hill has become a household name in Nevada but that's not necessarily the goal everywhere.
"We certainly plan to have an extremely substantial brand name presence in New Jersey," he said. "In other states, it will just depend on policy and possibly who our regional partner is."
"The US is going to be the biggest sports betting market in the world," he included. "Obviously that's not going to happen on day one."
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UK Betting Firms Gamble on United States After Sports Wager Ruling
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