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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 wagering starts to spread in America.

From Tuesday, new rules on sports betting came into impact in Delaware, a coast state about 2 hours from Washington.
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Neighbouring New Jersey might 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 sports betting wagering.

The market sees a "when in a generation" chance to establish a new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who heads leisure research study at Davy.

For UK firms, which are grappling with debt consolidation, increased online competitors and tougher rules from UK regulators, the timing is especially suitable.

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But the industry states depending on the US remains a dangerous bet, as UK companies deal with complicated state-by-state regulation and competitors from entrenched local interests.

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

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

Firms are wishing to tap into more of that activity after last month's decision, which struck down a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.

The judgment found the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that concern to local lawmakers.
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That is anticipated to result in considerable variation in how companies get certified, where sports betting can take place, and which occasions are open to speculation - with big implications for the size of the market.

Potential profits varieties from $4.2 bn to practically $20bn each year depending upon elements like the number of states relocate to legalise, Oxford Economics estimated in a 2017 research 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 experts KPMG.
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Now, he stated: "I believe the majority of people ... are looking at this as, 'it's an opportunity 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'."
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'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, producing a market with about $6bn in annual revenue.

But bookies face a far various landscape in America than they perform in the UK, where sports betting stores are a frequent sight.

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

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

States have actually also been sluggish to legalise numerous forms of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to get rid of barriers.

While sports betting is typically viewed in its own classification, "it plainly remains to be seen whether it gets the kind of momentum people 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 arrested in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a consultant, he states UK companies ought to approach the marketplace thoroughly, selecting partners with caution and preventing missteps that might lead to regulator reaction.

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

'It will be collaborations'

As legalisation starts, sports betting wagering companies are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which want to gather a portion of revenue as an "stability charge".
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International business face the included obstacle of a powerful existing gaming market, with casino operators, state-run lottos and Native American tribes that are seeking to protect their grass.
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Analysts state UK firms will require to strike partnerships, providing their expertise and technology in order to make inroads.

They point to SBTech's recent announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the type of offers likely to materialise.

"It will be a win-win for everyone, but it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will simply depend'

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

The business has actually been investing in the US market because 2011, when it acquired 3 US companies to establish a presence in Nevada.

William Hill now utilizes about 450 people in the US and has actually revealed partnerships with gambling establishments in Iowa and New Jersey.

It works as danger manager for the Delaware Lottery and has actually invested millions alongside a regional developer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a household name in Nevada however that's not always the goal everywhere.

"We certainly plan to have a very considerable brand existence in New Jersey," he said. "In other states, it will simply depend on guideline and possibly who our regional partner is."

"The US is going to be the greatest sports betting wagering market in the world," he added. "Obviously that's not going to occur on the first day."

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