UK wagering on US after sports betting wager judgment
5 June 2018
By Natalie Sherman
Business press reporter, New York
It's high stakes for UK companies as sports betting wagering starts to spread out in America.
From Tuesday, new rules on sports betting entered into result in Delaware, a tiny east coast state about 2 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 way for states to permit sports betting.
The market sees a "as soon as in a generation" chance to establish a new market in sports betting-mad America, stated Dublin-based financial analyst David Jennings, who heads leisure research at Davy.
For UK companies, which are facing debt consolidation, increased online competition and tougher rules from UK regulators, the timing is especially suitable.
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But the market says depending on the US stays a dangerous bet, as UK companies face complex state-by-state guideline and competitors from established regional interests.
"It's something that we're truly concentrating on, however similarly we do not want to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which just recently bought the US dream sports betting site FanDuel.
'Take some time'
The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income in 2015, according to a report by Technavio, external published in January.
Firms are hoping to use 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 ruling found the law was an over-reach of federal power. But the court it did not in fact legalise sports betting, leaving that question to local legislators.
That is expected to lead to significant variation in how firms get accredited, where sports betting wagering can occur, and which occasions are open to speculation - with huge implications for the size of the marketplace.
Potential income ranges from $4.2 bn to almost $20bn each year depending upon factors like the number of states transfer 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 huge'", said Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he stated: "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, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some form by 2023, developing a market with about $6bn in yearly earnings.
But bookies face a far different landscape in America than they perform in the UK, where sports betting shops are a regular sight.
US laws restricted sports betting mostly to Native American lands and Nevada's Las Vegas strip till relatively recently.
In the popular imagination, sports betting has long been linked to a 1919 baseball World Series match-fixing scandal.
States have also been sluggish to legalise many kinds of online sports betting, regardless of a 2011 Justice Department opinion that appeared to eliminate challenges.
While sports betting is typically viewed in its own classification, "it clearly stays to be seen whether it gets the sort of momentum people think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.
David Carruthers is the former chief executive of BetonSports, who was apprehended in the US in 2006 for running an offshore online sportsbook and served prison time.
Now a consultant, he says UK companies must approach the marketplace thoroughly, choosing partners with care and preventing bad moves that could result in regulator reaction.
"This is an opportunity for the American sports betting bettor ... I'm not sure whether it is an opportunity for business," he says. "It really is dependent on the outcome of [state] legislation and how business operators pursue the opportunity."
'It will be partnerships'
As legalisation begins, sports betting firms are lobbying to ward off high tax rates, along with demands by US sports betting leagues, which desire to collect a portion of profits as an "stability charge".
International companies deal with the included challenge of an effective existing gaming market, with gambling establishment operators, state-run lottos and Native American tribes that are looking for to safeguard their turf.
Analysts state UK companies will require to strike partnerships, using their expertise and technology 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 most likely to materialise.
"It will be a win-win for everyone, however it will be collaborations and it will be driven by innovation," Mr Hawkley stated.
'It will just depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.
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The company has been buying the US market considering that 2011, when it purchased three US firms to develop an existence in Nevada.
William Hill now utilizes about 450 people in the US and has revealed partnerships with gambling establishments in Iowa and New Jersey.
It works as risk supervisor for the Delaware Lottery and has invested millions along with a regional designer in a New Jersey horse racing track.
Mr Asher said William Hill has ended up being a home name in Nevada however that's not always the goal all over.
"We certainly plan to have a very considerable brand name existence in New Jersey," he said. "In other states, it will simply depend upon regulation and potentially who our local partner is."
"The US is going to be the biggest sports betting market worldwide," he added. "Obviously that's not going to happen on day one."
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UK Betting Firms Gamble on uS After Sports Wager Ruling
florinezda249 edited this page 2024-12-18 14:44:50 +00:00