UK sports betting firms gamble on US after sports betting wager judgment
5 June 2018
By Natalie Sherman
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Business reporter, New York
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It's high stakes for UK firms as sports betting starts to spread out in America.
From Tuesday, new rules on wagering entered result in Delaware, a tiny east coast state about two hours from Washington.
Neighbouring New Jersey could start accepting sports betting bets as early as Friday.
The modifications are the very first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to allow .
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The market sees a "once in a generation" chance to establish a brand-new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.
For UK companies, which are coming to grips with combination, increased online competition and tougher guidelines from UK regulators, the timing is particularly opportune.
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But the market states relying on the US stays a dangerous bet, as UK companies face complicated state-by-state guideline and competition from entrenched regional interests.
"It's something that we're actually concentrating on, however similarly we do not wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which just recently purchased the US fantasy sports betting website FanDuel.
'Take time'
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The US represented about 23% of the world's $244bn (₤ 182bn) in gaming revenue last year, according to a report by Technavio, external published in January.
Firms are hoping to tap into more of that activity after last month's decision, which struck down a 1992 federal law that disallowed states beyond Nevada and a couple of others from authorising sports betting wagering.
The judgment 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 substantial variation in how firms get accredited, where sports betting wagering can happen, and which events are open to speculation - with big ramifications for the size of the market.
Potential profits ranges from $4.2 bn to nearly $20bn every year depending upon aspects like how many 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 many people ... are taking a look at this as, 'it's an opportunity however it's not going to be $20bn and it's going to be state by state and it's going to take time'."
'Remains to be seen"
Chris Grove, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some kind by 2023, creating a market with about $6bn in annual revenue.
But bookmakers face a far different landscape in America than they carry out in the UK, where wagering shops are a frequent sight.
US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip until fairly just recently.
In the popular imagination, sports betting has actually long been connected to a 1919 baseball World Series match-fixing scandal.
States have also been slow to legalise many types of online gambling, despite a 2011 Justice Department opinion that appeared to eliminate challenges.
While sports betting wagering is generally viewed in its own category, "it clearly stays to be seen whether it gets the type of momentum individuals think it will," said 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 arrested in the US in 2006 for running an overseas online sportsbook and served prison time.
Now an expert, he states UK companies ought to approach the market carefully, selecting partners with care and preventing missteps that might lead to regulator reaction.
"This is a chance for the American sports betting wagerer ... I'm unsure whether it is an opportunity for business," he states. "It really is reliant on the result of [state] legislation and how business operators pursue the chance."
'It will be partnerships'
As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which desire to collect a percentage of income as an "integrity cost".
International companies deal with the added challenge of an effective existing video gaming industry, with gambling establishment operators, state-run lotteries and Native American tribes that are looking for to safeguard their turf.
Analysts state UK firms will require to strike collaborations, offering their knowledge and innovation in order to make inroads.
They point to SBTech's current statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.
"It will be a win-win for everybody, however it will be partnerships and it will be driven by innovation," Mr Hawkley said.
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'It will simply depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.
The business has actually been purchasing the US market given that 2011, when it acquired three US firms to establish a presence in Nevada.
William Hill now utilizes about 450 individuals in the US and has revealed partnerships with casinos in Iowa and New Jersey.
It works as danger supervisor for the Delaware Lottery and has invested millions alongside a local developer in a New Jersey horse racing track.
Mr Asher said William Hill has become a home name in Nevada however that's not necessarily the objective everywhere.
"We definitely intend to have a really substantial brand existence in New Jersey," he stated. "In other states, it will simply depend upon guideline and possibly who our regional partner is."
"The US is going to be the greatest sports betting market worldwide," he added. "Obviously that's not going to happen on the first day."
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UK Betting Firms Gamble on United States After Sports Wager Ruling
coralburdine4 edited this page 2025-01-01 09:23:58 +08:00