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UK sports betting companies gamble on US after sports betting wager judgment
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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 betting came into impact in Delaware, a small east coast state about two hours from Washington.

Neighbouring New Jersey might begin accepting sports betting bets as early as Friday.

The modifications are the very first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.

The market sees a "when in a generation" chance to develop a new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research at Davy.

For UK firms, which are coming to grips with combination, increased online competitors and harder rules from UK regulators, the timing is particularly appropriate.

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But the market says relying on the US remains a dangerous bet, as UK companies face complicated state-by-state guideline and competition from entrenched local interests.

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

'Take time'

The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income last year, according to a report by Technavio, external published in January.
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Firms are wishing to tap into 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 found the law was an over-reach of federal power. But the court it did not actually legalise sports betting, leaving that question to regional lawmakers.

That is expected to cause considerable variation in how get certified, where sports betting wagering can occur, and which events are open to speculation - with big implications for the size of the market.

Potential earnings varieties from $4.2 bn to nearly $20bn annually depending upon elements like how lots of states relocate to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.

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

Now, he stated: "I believe many 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'."
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'Remains to be seen"

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

But bookies face a far different landscape in America than they carry out in the UK, where betting stores are a regular sight.

US laws minimal sports betting mostly to Native American lands and Nevada's Las Vegas strip until reasonably recently.
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In the popular imagination, sports betting has long been connected to a 1919 baseball World Series match-fixing scandal.

States have also been sluggish to legalise many types of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to eliminate barriers.

While sports betting is typically seen in its own classification, "it clearly stays to be seen whether it gets the kind of momentum people believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.

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

Now an expert, he states UK companies ought to approach the marketplace carefully, selecting partners with caution and avoiding missteps that could cause regulator backlash.

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

'It will be partnerships'

As legalisation starts, sports betting firms are lobbying to ward off high tax rates, in addition to requests 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 a powerful existing video gaming industry, with casino operators, state-run lottery games and Native American tribes that are looking for to defend their grass.

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

They indicate SBTech's current statement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the sort 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 realities.

The company has actually been purchasing the US market considering that 2011, when it acquired 3 US companies to establish a presence in Nevada.

William Hill now utilizes about 450 individuals in the US and has actually announced partnerships with casinos in Iowa and New Jersey.

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

Mr Asher stated William Hill has actually ended up being a household name in Nevada but that's not necessarily the objective all over.
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"We certainly plan to have a very considerable brand presence in New Jersey," he stated. "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 added. "Obviously that's not going to take place on day one."

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