firms bet on US after sports betting wager ruling
bit.ly
5 June 2018

By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, new rules on sports betting entered into impact 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 very first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting wagering.

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

For UK firms, which are grappling with debt consolidation, increased online competition and harder rules from UK regulators, the timing is particularly opportune.
bit.ly
Why the gaming market deals with an uncertain future

How does prohibited sports betting work and what are the fears?
bet9ja.com
But the market says counting on the US remains a risky bet, as UK business face complicated state-by-state policy and competition from entrenched regional interests.

"It's something that we're really concentrating on, but equally we don't want to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which just recently acquired the US fantasy sports betting site FanDuel.

'Take some time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming income in 2015, according to a report by Technavio, external published in January.

Firms are hoping to take advantage of more of that activity after last month's choice, which struck down 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 actually legalise sports betting, leaving that concern to local lawmakers.

That is anticipated to lead to considerable variation in how companies get licensed, where sports betting wagering can take place, and which occasions are open to speculation - with big ramifications for the size of the market.

Potential revenue ranges from $4.2 bn to nearly $20bn every year depending on elements like the number of states relocate 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 big'", said Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I think most individuals ... 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 require time'."
bet9ja.com
'Remains to be seen"

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

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

US laws limited gambling largely 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 sluggish to legalise numerous types of online gambling, despite a 2011 Justice Department opinion that appeared to remove challenges.

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

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

Now a specialist, he says UK companies must approach the market thoroughly, picking partners with care and preventing missteps that could result in regulator backlash.

"This is a chance for the American sports betting wagerer ... I'm unsure whether it is a chance for company," he states. "It actually depends on the result of [state] legislation and how the organization operators pursue the chance."
bet9ja.com
'It will be collaborations'

As legalisation starts, sports betting wagering firms are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which desire to collect a percentage of earnings as an "stability cost".

International business deal with the included obstacle of a powerful existing gaming market, with casino operators, state-run lotteries and Native American people that are seeking to defend their turf.

Analysts state UK companies will require to strike collaborations, providing their proficiency and technology in order to make inroads.

They point to SBTech's current statement that it is offering technology 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 collaborations and it will be driven by technology," Mr Hawkley said.

'It will simply depend'

Joe Asher, chief executive at William Hill US, is clear-eyed about the realities.

The company has been buying the US market since 2011, when it bought three US firms to develop a presence in Nevada.

William Hill now employs about 450 people in the US and has actually revealed partnerships with casinos in Iowa and New Jersey.

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

Mr Asher stated William Hill has become a family name in Nevada however that's not always the goal all over.

"We certainly mean to have an extremely substantial brand presence in New Jersey," he said. "In other states, it will just depend on policy and potentially who our regional partner is."

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

More on this story

US judgment opens way for sports betting wagering

14 May 2018

Paddy Power buys dream sports betting site

23 May 2018