UK wagering companies bet on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business reporter, New york city

It's high stakes for UK firms as sports betting starts to spread in America.
bet9ja.com
From Tuesday, brand-new rules on sports betting entered into impact in Delaware, a tiny east coast state about two hours from Washington.

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

The changes are the very first in what might end up being a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting.
bet9ja.com
The industry sees a "once 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 companies, which are grappling with debt consolidation, increased online competition and tougher guidelines from UK regulators, the timing is especially suitable.

Why the sports betting industry faces an unpredictable future

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

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

"It's something that we're really focusing on, but similarly we do not desire to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently bought the US fantasy sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming revenue in 2015, according to a report by Technavio, external released in January.
bit.ly
Firms are wishing to use more of that activity after last month's decision, which overruled a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting wagering.

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

That is anticipated to cause considerable variation in how companies get certified, where sports betting can happen, and which events are open to speculation - with huge ramifications for the size of the market.

Potential earnings varieties from $4.2 bn to practically $20bn every year depending on elements like the number of states relocate to legalise, Oxford Economics approximated in a 2017 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 experts KPMG.
bet9ja.com
Now, he said: "I think many people ... are taking a look at this as, 'it's a chance however 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, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some kind by 2023, developing a market with about $6bn in yearly revenue.

But bookmakers face a far various landscape in America than they do in the UK, where wagering shops are a frequent sight.

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

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

States have actually also been sluggish to legalise lots of kinds of online gaming, despite a 2011 Justice Department viewpoint that appeared to remove challenges.

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

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

Now an expert, he says UK companies need to approach the market thoroughly, picking partners with caution and preventing bad moves that might lead to regulator backlash.

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

'It will be partnerships'

As legalisation begins, sports betting firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of income as an "stability fee".

International business deal with the added obstacle of an effective existing video gaming market, with casino operators, state-run lottos and Native American tribes that are looking for to safeguard their grass.

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

They point to SBTech's current announcement that it is providing innovation for Kentucky Derby operator Churchill Downs as an example of the type of offers likely to materialise.
bet9ja.com
"It will be a win-win for everybody, but it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will just depend'

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

The company has been investing in the US market considering that 2011, when it bought 3 US companies to develop a presence in Nevada.

William Hill now uses about 450 individuals in the US and has revealed collaborations with casinos in Iowa and New Jersey.

It works as danger manager for the Delaware Lottery and has invested millions together with a regional designer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually become a family name in Nevada but that's not necessarily the objective everywhere.

"We certainly mean to have a very significant brand name existence in New Jersey," he stated. "In other states, it will simply depend on guideline and possibly who our regional partner is."
bet9ja.com
"The US is going to be the biggest sports betting market in the world," he included. "Obviously that's not going to take place on day one."

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

14 May 2018

Paddy Power purchases dream sports betting website

23 May 2018