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UK sports betting companies bet on US after sports betting wager judgment
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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 out in America.

From Tuesday, brand-new guidelines on sports betting entered into effect in Delaware, a tiny east coast state about two hours from Washington.

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

The changes are the first in what could end up being a wave of legalisation after the Supreme Court last month cleared the way for states to enable sports betting.

The market sees a "as soon as in a generation" chance to develop a new market in sports betting-mad America, said Dublin-based monetary analyst David Jennings, who heads leisure research at Davy.

For UK firms, which are facing combination, increased online competitors and harder rules from UK regulators, the timing is especially suitable.

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But the market says counting on the US remains a dangerous bet, as UK business face complicated state-by-state regulation and competition from established regional interests.

"It's something that we're truly concentrating on, however equally we don't wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently bought the US dream sports betting website FanDuel.

'Take some time'

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

Firms are wanting to tap into more of that activity after last month's decision, which struck down a 1992 federal law that barred states beyond Nevada and a couple of 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, leaving that question to local lawmakers.

That is expected to lead to significant variation in how companies get certified, where sports betting wagering can take place, and which events are open to speculation - with huge ramifications for the size of the marketplace.

ranges from $4.2 bn to practically $20bn each year depending upon aspects like the number of states relocate 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 big'", said Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he stated: "I believe 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 some time'."

'Remains to be seen"

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

But bookmakers deal with a far different landscape in America than they do in the UK, where sports betting stores are a regular sight.

US laws minimal sports betting mostly to Native American lands and Nevada's Las Vegas strip till reasonably just recently.

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

States have likewise been sluggish to legalise many types of online gambling, despite a 2011 Justice Department viewpoint that appeared to eliminate challenges.

While sports betting is normally seen in its own classification, "it plainly stays to be seen whether it gets the sort of momentum individuals think it will," stated Keith Miller, law professor 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 consultant, he states UK companies should approach the market carefully, picking partners with caution and avoiding mistakes that might result in regulator backlash.

"This is a chance for the American sports betting bettor ... I'm unsure whether it is an opportunity for company," he says. "It truly is reliant on the result of [state] legislation and how business operators pursue the chance."

'It will be collaborations'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which want to gather a portion of revenue as an "integrity charge".

International business face the added challenge of an effective existing gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to safeguard their grass.

Analysts say UK firms will require to strike collaborations, offering their know-how and innovation in order to make inroads.

They point to SBTech's current announcement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the type of deals 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 said.

'It will just depend'

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

The business has actually been buying the US market given that 2011, when it purchased 3 US companies to establish a presence in Nevada.

William Hill now uses about 450 people in the US and has actually announced partnerships with casinos in Iowa and New Jersey.

It works as danger supervisor for the Delaware Lottery and has invested millions together with a regional designer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually ended up being a home name in Nevada but that's not necessarily the objective all over.

"We certainly plan to have a really significant brand presence in New Jersey," he stated. "In other states, it will just depend on guideline and potentially who our regional partner is."

"The US is going to be the biggest sports betting market on the planet," he included. "Obviously that's not going to take place on day one."

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