UK wagering firms gamble on US after sports betting wager judgment
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 rules on wagering entered into impact in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey could start accepting sports betting bets as early as Friday.
The changes are the very first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.
The industry sees a "as soon as in a generation" opportunity to develop a new market in sports betting-mad America, said Dublin-based financial expert David Jennings, who heads leisure research study at Davy.
For UK companies, which are coming to grips with consolidation, increased online competition and harder guidelines from UK regulators, the timing is especially opportune.
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But the industry says counting on the US remains a risky bet, as UK companies face complex state-by-state policy and competitors from entrenched regional interests.
"It's something that we're truly focusing on, however equally we don't want to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which recently bought the US fantasy sports betting website FanDuel.
'Take some time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming revenue last year, according to a report by Technavio, external released in January.
Firms are hoping to take advantage of more of that activity after last month's decision, which struck down a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting wagering.
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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 question to local legislators.
That is anticipated to lead to considerable variation in how companies get licensed, where can take place, and which events are open to speculation - with huge implications for the size of the marketplace.
Potential earnings varieties from $4.2 bn to almost $20bn annually depending on elements like the number of states transfer 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 huge'", stated Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he said: "I believe 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 time'."
'Remains to be seen"
Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in annual earnings.
But bookmakers face a far different landscape in America than they do in the UK, where sports betting shops are a frequent sight.
US laws limited gaming largely to Native American lands and Nevada's Las Vegas strip until reasonably just recently.
In the popular creativity, 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 kinds of online gambling, in spite of a 2011 Justice Department viewpoint that appeared to get rid of barriers.
While sports betting wagering is normally seen in its own classification, "it clearly stays to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting guideline.
David Carruthers is the previous chief executive of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served jail time.
Now an expert, he says UK firms must approach the market thoroughly, selecting partners with caution and preventing mistakes that might cause regulator reaction.
"This is a chance for the American sports betting gambler ... I'm uncertain whether it is an opportunity for service," he states. "It really is dependent on the outcome of [state] legislation and how business operators pursue the opportunity."
'It will be collaborations'
As legalisation begins, sports betting firms are lobbying to fend off high tax rates, as well as demands by US sports betting leagues, which wish to collect a portion of income as an "stability fee".
International companies face the added challenge of a powerful existing video gaming market, with casino operators, state-run lotteries and Native American people that are looking for to safeguard their grass.
Analysts state UK companies will need to strike collaborations, using their competence and technology in order to make inroads.
They point to SBTech's recent statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the type of offers most likely to materialise.
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"It will be a win-win for everyone, but it will be collaborations and it will be driven by technology," 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 purchasing the US market given that 2011, when it bought 3 US firms to develop an existence in Nevada.
William Hill now uses about 450 people in the US and has actually announced collaborations with gambling establishments in Iowa and New Jersey.
It works as danger supervisor for the Delaware Lottery and has actually invested millions along with a local developer in a New Jersey horse racing track.
Mr Asher said William Hill has become a family name in Nevada however that's not necessarily the goal all over.
"We definitely mean to have a really substantial brand name existence in New Jersey," he said. "In other states, it will just depend on policy and possibly who our regional partner is."
"The US is going to be the greatest sports betting wagering market in the world," he included. "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
damiancortez41 edited this page 2024-12-18 08:30:46 +00:00