bit.ly
UK betting firms bet on US after sports betting wager ruling
bet9ja.com
5 June 2018
bit.ly
By Natalie Sherman
bit.ly
Business reporter, New york city

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

From Tuesday, new rules on betting came 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 changes are the first in what could become a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting.

The industry sees a "once 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 coming to grips with debt consolidation, increased online competitors and harder guidelines from UK regulators, the timing is especially suitable.

Why the betting market faces an uncertain future

How does unlawful sports betting wagering work and what are the fears?

But the market says counting on the US stays a dangerous bet, as UK companies face complex state-by-state regulation and competition from entrenched local interests.

"It's something that we're truly focusing on, but equally we do not wish to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.

'Take time'

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

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

The judgment found the law was an over-reach of federal power. But the court it did not in fact legalise sports betting wagering, leaving that concern to regional lawmakers.

That is anticipated to result in substantial variation in how firms get licensed, where sports betting wagering can occur, and which events are open to speculation - with huge ramifications for the size of the marketplace.

Potential profits varieties from $4.2 bn to practically $20bn annually depending on factors 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'", said Will Hawkley, London-based head of leisure for experts KPMG.

Now, he said: "I think many 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'."

'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, producing a market with about $6bn in yearly revenue.

But bookmakers deal with a far various landscape in America than they do in the UK, where sports betting shops are a regular sight.

US laws restricted gaming mostly to Native American lands and Nevada's Las Vegas strip up until fairly recently.

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

States have actually also been sluggish to legalise many kinds of online gaming, regardless of a 2011 Justice Department viewpoint that appeared to remove obstacles.

While sports betting is usually viewed in its own classification, "it clearly remains to be seen whether it gets the type of momentum individuals believe it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting guideline.

David Carruthers is the former chief executive of BetonSports, who was detained in the US in 2006 for running an offshore online sportsbook and served prison time.

Now a specialist, he states UK companies should approach the market thoroughly, picking partners with caution and preventing errors that could result in regulator backlash.

"This is an opportunity for the American sports betting wagerer ... I'm not sure whether it is a chance for company," he states. "It actually depends on the outcome of [state] legislation and how business operators pursue the chance."

'It will be partnerships'

As legalisation begins, sports betting wagering companies are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which wish to collect a percentage of income as an "stability fee".

International business face the added difficulty of an effective existing video gaming industry, with casino operators, state-run lottos and Native American people that are seeking to defend their grass.

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

They indicate SBTech's current announcement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the kind of deals likely to materialise.

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

'It will just depend'

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

The company has actually been purchasing the US market given that 2011, when it acquired three US companies to establish a presence in Nevada.

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

It works as threat manager for the Delaware Lottery and has invested millions along with a local designer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually ended up being a home name in Nevada but that's not always the objective everywhere.

"We certainly plan to have an extremely significant brand presence 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 biggest sports betting market on the planet," he added. "Obviously that's not going to occur on day one."

More on this story

US ruling opens way for sports betting

14 May 2018

Paddy Power purchases dream sports betting website

23 May 2018