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UK sports betting companies bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business reporter, New york city

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

From Tuesday, brand-new guidelines on sports betting entered into result in Delaware, a tiny east coast state about two hours from Washington.

Neighbouring New Jersey could begin 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 way for states to enable sports betting.

The market sees a "once in a generation" opportunity to develop a brand-new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads research at Davy.

For UK companies, which are facing consolidation, increased online competition and harder guidelines from UK regulators, the timing is especially suitable.

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But the industry says counting on the US stays a risky bet, as UK business deal with complex state-by-state guideline and competitors from established local interests.

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

'Require time'

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

Firms are wanting to use more of that activity after last month's choice, which struck down a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting wagering.

The ruling 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 legislators.

That is expected to cause significant variation in how companies get licensed, where sports betting wagering can take place, and which events are open to speculation - with huge ramifications for the size of the marketplace.

Potential income varieties from $4.2 bn to almost $20bn yearly depending on elements like the number of states move to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.

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

Now, he stated: "I believe the majority of people ... are looking 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'."

'Remains to be seen"

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

But bookmakers face a far different landscape in America than they perform in the UK, where wagering shops are a regular sight.

US laws restricted sports betting largely to Native American lands and Nevada's Las Vegas strip up until reasonably just recently.

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

States have actually likewise been sluggish to legalise many forms of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

While sports betting wagering is normally seen in its own category, "it plainly stays to be seen whether it gets the kind of momentum individuals believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering regulation.
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David Carruthers is the previous chief executive of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served prison time.

Now a specialist, he states UK companies need to approach the market thoroughly, picking partners with caution and preventing missteps that could cause regulator reaction.

"This is an opportunity for the American sports betting bettor ... I'm unsure whether it is a chance for company," he states. "It really is dependent on the outcome of [state] legislation and how business operators pursue the opportunity."

'It will be partnerships'

As legalisation begins, sports betting companies are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which desire to collect a percentage of earnings as an "integrity fee".

International business deal with the included difficulty of a powerful existing gaming industry, with casino operators, state-run lottery games and Native American tribes that are seeking to defend their grass.

Analysts say UK firms will need to strike partnerships, offering their knowledge and technology in order to make inroads.

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

"It will be a win-win for everybody, but it will be collaborations and it will be driven by technology," Mr Hawkley said.

'It will simply depend'

Joe Asher, primary executive at William Hill US, is clear-eyed about the truths.
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The company has been buying the US market considering that 2011, when it bought three US firms to establish an existence in Nevada.

William Hill now uses about 450 people in the US and has announced partnerships with gambling establishments in Iowa and New Jersey.

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

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

"We definitely plan to have a very considerable brand name existence in New Jersey," he said. "In other states, it will just depend on policy and possibly who our regional partner is."

"The US is going to be the most significant sports betting market in the world," he added. "Obviously that's not going to happen on the first day."

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