UK sports betting on US after sports betting wager ruling

5 June 2018
bet9ja.com
By Natalie Sherman

Business reporter, New York

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

From Tuesday, new guidelines on sports betting entered into impact in Delaware, a tiny east coast state about 2 hours from Washington.
bet9ja.com
Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.

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

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

Why the sports betting industry faces an unsure future

How does prohibited sports betting work and what are the worries?

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

"It's something that we're truly concentrating on, but similarly we do not want to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently acquired the US dream sports betting site FanDuel.

'Take time'

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

Firms are intending to tap into more of that activity after last month's choice, which struck down a 1992 federal law that barred states beyond Nevada and a few others from authorising sports betting wagering.

The judgment found the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to local legislators.

That is anticipated to result in substantial variation in how companies get accredited, where sports betting can take place, and which events are open to speculation - with big ramifications for the size of the market.

Potential earnings ranges from $4.2 bn to practically $20bn every year depending on aspects like how numerous states transfer to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.

"There was a great deal of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for specialists KPMG.
bet9ja.com
Now, he stated: "I believe many people ... are taking a look 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 require time'."

'Remains to be seen"

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

But bookmakers face a far different landscape in America than they perform in the UK, where wagering shops are a regular sight.

US laws restricted sports betting mainly to Native American lands and Nevada's Las Vegas strip till fairly recently.

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

States have likewise been sluggish to legalise numerous kinds of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to remove challenges.
bit.ly
While sports betting is typically seen in its own classification, "it plainly remains to be seen whether it gets the type of momentum people think it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting policy.

David Carruthers is the previous president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served jail time.

Now a specialist, he states UK firms should approach the market carefully, selecting partners with caution and avoiding mistakes that might result in regulator backlash.

"This is a chance for the American sports betting wagerer ... I'm not exactly sure whether it is a chance for organization," he states. "It actually is dependent on the result of [state] legislation and how business operators pursue the chance."

'It will be collaborations'

As legalisation begins, 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 "integrity cost".

International companies face the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lotteries and Native American people that are seeking to defend their turf.

Analysts say UK firms will need to strike collaborations, providing their knowledge and innovation in order to make inroads.

They point to 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 collaborations 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 actually been investing in the US market because 2011, when it purchased three US companies to develop a presence in Nevada.

William Hill now uses about 450 people in the US and has announced collaborations with casinos in Iowa and New Jersey.
bit.ly
It works as risk manager for the Delaware Lottery and has actually invested millions alongside a regional designer in a New Jersey horse racing track.

Mr Asher said William Hill has actually ended up being a household name in Nevada but that's not necessarily the objective everywhere.
bet9ja.com
"We certainly intend to have a very significant brand existence in New Jersey," he stated. "In other states, it will just depend upon policy and possibly who our regional partner is."

"The US is going to be the biggest sports betting market worldwide," he added. "Obviously that's not going to occur on day one."

More on this story
bet9ja.com
US judgment opens method for sports betting

14 May 2018

Paddy Power purchases dream sports betting website

23 May 2018