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UK sports betting firms bet on US after sports betting wager ruling
5 June 2018
By Natalie Sherman
Business press reporter, New york city
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 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 end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting.
The market sees a "when in a generation" opportunity to develop a brand-new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who heads leisure research study at Davy.
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For UK firms, which are grappling with consolidation, increased online competitors and harder rules from UK regulators, the timing is especially suitable.
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But the industry says counting on the US remains a risky bet, as UK business deal with complicated state-by-state policy and competitors from established local interests.
"It's something that we're actually focusing on, but equally we do not want to overhype it," stated James Midmer, at Paddy Power Betfair, which just recently acquired 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 income 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 choice, which overruled a 1992 federal law that barred states beyond Nevada and a couple of others from authorising sports betting.
The ruling discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that concern to local legislators.
That is expected to result in considerable variation in how firms get licensed, where sports betting can occur, and which occasions are open to speculation - with big implications for the size of the market.
Potential income ranges from $4.2 bn to nearly $20bn every year depending upon factors like how lots of states move to legalise, Oxford Economics estimated 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 consultants KPMG.
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Now, he said: "I believe many people ... are looking 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 some time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in annual income.
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But bookies face a far different landscape in America than they carry out in the UK, where wagering stores are a frequent sight.
US laws restricted sports betting largely to Native American lands and Nevada's Las Vegas strip until fairly recently.
In the popular creativity, sports betting wagering has actually long been linked to a 1919 baseball World Series match-fixing scandal.
States have actually also been slow to legalise lots of kinds of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to get rid of challenges.
While sports betting wagering is generally seen in its own category, "it clearly remains to be seen whether it gets the kind of momentum individuals think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting policy.
David Carruthers is the previous president of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served jail time.
Now an expert, he states UK companies must approach the marketplace thoroughly, picking partners with care and avoiding mistakes that could result in regulator reaction.
"This is an opportunity for the American sports betting gambler ... I'm unsure whether it is a chance for organization," he says. "It really is dependent on the outcome of [state] legislation and how business operators pursue the chance."
'It will be collaborations'
As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, as well as requests by US sports betting leagues, which want to collect a percentage of earnings as an "integrity cost".
International companies face the added obstacle of an effective existing gaming industry, with gambling establishment operators, state-run lottos and Native American tribes that are looking for to defend their turf.
Analysts state UK firms will need to strike partnerships, offering their expertise and innovation in order to make inroads.
They indicate SBTech's current statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind of offers likely to materialise.
"It will be a win-win for everyone, however it will be collaborations and it will be driven by technology," Mr Hawkley stated.
'It will just depend'
Joe Asher, president at William Hill US, is clear-eyed about the truths.
The business has actually been buying the US market since 2011, when it acquired 3 US firms to establish a presence in Nevada.
William Hill now utilizes about 450 people in the US and has actually announced partnerships with gambling establishments in Iowa and New Jersey.
It works as danger supervisor for the Delaware Lottery and has invested millions along with a local designer in a New Jersey horse racing track.
Mr Asher stated William Hill has become a home name in Nevada however that's not always the objective everywhere.
"We definitely plan to have a very substantial brand name existence in New Jersey," he stated. "In other states, it will just depend upon policy and possibly who our regional partner is."
"The US is going to be the biggest sports betting market worldwide," he added. "Obviously that's not going to occur on the first day."
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UK Betting Firms Gamble on United States After Sports Wager Ruling
mercedesmitche edited this page 2024-12-30 18:37:02 +00:00