UK wagering firms bet on US after sports betting wager ruling
5 June 2018
It's high stakes for UK firms as sports betting wagering starts to spread in America.
From Tuesday, new guidelines on sports betting entered effect in Delaware, a small east coast state about 2 hours from Washington.
Neighbouring New Jersey might start accepting sports betting bets as early as Friday.
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The changes are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting wagering.
The industry sees a "as soon as in a generation" opportunity to establish a new market in sports betting-mad America, said Dublin-based financial analyst David Jennings, who heads leisure research study at Davy.
For UK companies, which are grappling with consolidation, increased online competition and tougher rules from UK regulators, the timing is particularly opportune.
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But the market says relying on the US stays a risky bet, as UK companies face complicated state-by-state regulation and competition from entrenched regional interests.
"It's something that we're really focusing on, however similarly we do not wish to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently bought the US fantasy sports betting website FanDuel.
'Take time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming earnings last year, according to a report by Technavio, external released in January.
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Firms are hoping to tap into more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states outside of Nevada and a couple of others from authorising sports betting wagering.
The judgment discovered the law was an over-reach of federal power. But the court it did not actually legalise sports betting wagering, leaving that question to local lawmakers.
That is anticipated to result in considerable variation in how firms get certified, where sports betting can occur, and which occasions are open to speculation - with huge implications for the size of the marketplace.
Potential profits varieties from $4.2 bn to nearly $20bn each year upon elements like the number of states relocate 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 substantial'", said Will Hawkley, London-based head of leisure for specialists KPMG.
Now, he said: "I believe the majority 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 some time'."
'Remains to be seen"
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Chris Grove, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some kind by 2023, creating a market with about $6bn in annual profits.
But bookies deal with a far different landscape in America than they perform in the UK, where wagering shops are a frequent sight.
US laws limited sports betting mostly to Native American lands and Nevada's Las Vegas strip till reasonably recently.
In the popular imagination, sports betting has long been linked to a 1919 baseball World Series match-fixing scandal.
States have actually likewise been slow to legalise many types of online gambling, in spite of a 2011 Justice Department opinion that appeared to eliminate obstacles.
While sports betting is generally viewed in its own category, "it plainly remains to be seen whether it gets the sort of momentum individuals think it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering regulation.
David Carruthers is the former president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served jail time.
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Now an expert, he states UK firms ought to approach the marketplace carefully, choosing partners with caution and preventing bad moves that could lead to regulator reaction.
"This is a chance for the American sports betting wagerer ... I'm uncertain whether it is a chance for service," he says. "It actually depends on the outcome of [state] legislation and how the company operators pursue the opportunity."
'It will be partnerships'
As legalisation starts, sports betting companies are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which wish to collect a portion of income as an "integrity fee".
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International companies deal with the added challenge of a powerful existing gaming industry, with gambling establishment operators, state-run lottos and Native American people that are seeking to protect their grass.
Analysts say UK companies will require to strike collaborations, using their proficiency and innovation in order to make inroads.
They point to SBTech's recent announcement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the sort of deals most likely to materialise.
"It will be a win-win for everyone, however it will be partnerships and it will be driven by technology," Mr Hawkley said.
'It will simply depend'
Joe Asher, president at William Hill US, is clear-eyed about the truths.
The business has been buying the US market considering that 2011, when it bought 3 US companies to establish an existence in Nevada.
William Hill now utilizes about 450 individuals in the US and has announced partnerships with casinos in Iowa and New Jersey.
It works as threat manager 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 actually become a home name in Nevada however that's not always the goal all over.
"We certainly mean to have an extremely significant brand presence in New Jersey," he said. "In other states, it will simply depend upon policy and potentially who our local partner is."
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"The US is going to be the most significant sports betting market on the planet," he included. "Obviously that's not going to happen on day one."
US ruling opens way for sports betting wagering
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UK Betting Firms Gamble on United States After Sports Wager Ruling
rachellelowran edited this page 2025-01-02 07:25:28 +01:00