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UK wagering companies bet on US after sports betting wager ruling
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5 June 2018

It's high stakes for UK companies as sports betting starts to spread in America.

From Tuesday, new rules on wagering came 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 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 allow sports betting wagering.

The industry sees a "once in a generation" opportunity to establish a brand-new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research study at Davy.

For UK companies, which are grappling with consolidation, increased online competitors and tougher rules from UK regulators, the timing is particularly opportune.

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But the market says counting on the US remains a risky bet, as UK companies deal with complex state-by-state guideline and competition from entrenched local interests.

"It's something that we're really focusing on, however similarly we do not desire to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which just recently bought the US fantasy sports betting website FanDuel.

'Require time'

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

Firms are wanting to use more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting.

The 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 anticipated to lead to considerable variation in how firms get certified, where sports betting wagering can occur, and which events are open to speculation - with huge implications for the size of the market.

Potential profits varieties from $4.2 bn to nearly $20bn each year depending upon factors like how numerous states relocate to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

"There was a lot of 'this is going to be huge'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he stated: "I think a lot of 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 time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some type by 2023, creating a market with about $6bn in annual revenue.

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

US laws minimal gaming mainly to Native American lands and Nevada's Las Vegas strip till reasonably recently.

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

States have also been slow to legalise lots of forms of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to eliminate challenges.

While sports betting wagering is generally viewed in its own category, "it clearly remains to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering guideline.

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 ought to approach the marketplace carefully, picking partners with caution and avoiding errors that could cause regulator backlash.

"This is a chance for the American sports betting wagerer ... I'm uncertain whether it is a chance for service," he states. "It truly depends on the result of [state] legislation and how business operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which wish to collect a portion of profits as an "integrity charge".

International business face the added difficulty of a powerful existing gaming industry, with gambling establishment operators, state-run lotteries and Native American tribes that are seeking to protect their turf.

Analysts state UK companies will need to strike partnerships, offering their expertise and innovation in order to make inroads.

They indicate SBTech's recent statement that it is providing 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 everybody, however it will be partnerships 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 been purchasing the US market considering that 2011, when it purchased three US firms to establish an existence in Nevada.

William Hill now employs about 450 people in the US and has revealed collaborations with gambling establishments in Iowa and New Jersey.

It works as threat supervisor for the Delaware Lottery and has actually invested millions alongside a local developer in a New Jersey horse racing track.

Mr Asher said William Hill has become a household name in Nevada but that's not necessarily the objective everywhere.

"We certainly plan to have a very significant brand name existence in New Jersey," he stated. "In other states, it will simply depend upon policy and potentially who our regional partner is."

"The US is going to be the greatest sports betting wagering market worldwide," he included. "Obviously that's not going to happen on the first day."

US ruling opens method for sports betting
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