UK sports betting firms gamble on US after sports betting wager judgment
bet9ja.com
5 June 2018
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By Natalie Sherman

Business press reporter, New York

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

From Tuesday, brand-new guidelines on wagering entered 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 changes are the first in what could become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting wagering.

The industry sees a "when in a generation" opportunity to develop a new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research at Davy.

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

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But the industry says depending on the US remains a risky bet, as UK companies face complicated state-by-state guideline and competitors from established local interests.

"It's something that we're truly concentrating on, however equally we don't desire to overhype it," said James Midmer, spokesperson 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 gaming revenue in 2015, according to a report by Technavio, external released in January.
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Firms are wanting to tap into more of that activity after last month's choice, 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 really legalise sports betting wagering, leaving that concern to regional lawmakers.

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

Potential income ranges from $4.2 bn to nearly $20bn every year 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'", stated Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he said: "I think many people ... are taking a look 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 take some time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some type by 2023, developing a market with about $6bn in yearly earnings.

But bookies face a far different landscape in America than they do 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 reasonably 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 slow to legalise lots of forms of online betting, in spite of a 2011 Justice Department opinion that appeared to remove obstacles.

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

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

Now a specialist, he states UK firms should approach the market thoroughly, picking partners with caution and preventing errors that might lead to regulator backlash.

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

As legalisation begins, sports betting wagering companies are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which wish to gather a portion of profits as an "stability cost".
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International companies deal with the included difficulty of a powerful existing video gaming market, with gambling establishment operators, state-run lottos and Native American tribes that are looking for to safeguard their grass.

Analysts state UK firms will require to strike collaborations, providing their knowledge and innovation in order to make inroads.

They indicate SBTech's recent announcement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the kind of offers most likely to materialise.

"It will be a win-win for everyone, however it will be collaborations and it will be driven by innovation," Mr Hawkley stated.

'It will just depend'

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

The company has been buying the US market considering that 2011, when it bought three US companies to develop a presence in Nevada.

William Hill now uses about 450 individuals in the US and has actually revealed collaborations with casinos in Iowa and New Jersey.
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It works as risk manager for the Delaware Lottery and has actually invested millions along with a regional developer in a New Jersey horse racing track.

Mr Asher stated William Hill has ended up being a household name in Nevada but that's not necessarily the goal everywhere.

"We certainly intend to have a really considerable brand name existence in New Jersey," he said. "In other states, it will simply 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 take place on day one."

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