UK betting companies bet on US after sports betting wager judgment
5 June 2018
By Natalie Sherman
Business press reporter, New york city
It's high stakes for UK firms as sports betting wagering starts to spread out in America.
From Tuesday, new rules on sports betting entered into impact in Delaware, a small 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 first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting.
The market sees a "once in a generation" opportunity to develop a new market in sports betting-mad America, stated Dublin-based financial analyst David Jennings, who heads leisure research at Davy.
For UK companies, which are facing consolidation, increased online competitors and harder rules from UK regulators, the timing is particularly appropriate.
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But the industry says relying on the US remains a dangerous bet, as UK business deal with complex state-by-state policy and competition from established regional interests.
"It's something that we're really concentrating on, however equally we do not desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently acquired the US fantasy sports betting site FanDuel.
'Require time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming profits in 2015, according to a report by Technavio, external published in January.
Firms are intending to use more of that activity after last month's decision, which overruled a 1992 federal law that disallowed states beyond Nevada and a few 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 regional lawmakers.
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That is expected to cause substantial variation in how firms get accredited, where sports betting can occur, and which occasions are open to speculation - with huge implications for the size of the marketplace.
Potential income ranges from $4.2 bn to nearly $20bn every year depending upon elements like how lots of states move 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'", stated Will Hawkley, London-based head of leisure for experts KPMG.
Now, he stated: "I think the majority of 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 take 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, producing a market with about $6bn in yearly earnings.
But bookies face a far different landscape in America than they carry out in the UK, where wagering stores are a regular sight.
US laws restricted gambling mostly to Native American lands and Nevada's Las Vegas strip up until reasonably just recently.
In the popular creativity, sports betting wagering has long been linked to a 1919 baseball World Series match-fixing scandal.
States have actually also been slow to legalise lots of types of online sports betting, despite a 2011 Justice Department viewpoint that appeared to eliminate obstacles.
While sports betting is generally viewed in its own classification, "it plainly remains to be seen whether it gets the type of momentum individuals think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting guideline.
David Carruthers is the former president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served prison time.
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Now a consultant, he states UK firms should approach the marketplace thoroughly, choosing partners with caution and preventing errors that could lead to regulator reaction.
"This is a chance for the American sports betting bettor ... I'm uncertain whether it is a chance for company," he states. "It really depends on the outcome of [state] legislation and how business operators pursue the chance."
'It will be collaborations'
As legalisation starts, sports betting firms are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which wish to gather a portion of profits as an "stability fee".
International companies deal with the included difficulty of an effective existing gaming market, with casino operators, state-run lottery games and Native American tribes that are seeking to defend their turf.
Analysts state UK companies will require to strike partnerships, using their knowledge and innovation in order to make inroads.
They point to SBTech's recent statement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.
"It will be a win-win for everybody, but it will be partnerships and it will be driven by innovation," Mr Hawkley stated.
'It will simply depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the realities.
The company has been investing in the US market because 2011, when it bought 3 US companies to establish a presence in Nevada.
William Hill now utilizes 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 along with a regional designer in a New Jersey horse racing track.
Mr Asher said William Hill has become a family name in Nevada however that's not necessarily the objective everywhere.
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"We certainly intend to have an extremely significant brand name existence in New Jersey," he said. "In other states, it will simply depend upon regulation and possibly who our regional partner is."
"The US is going to be the biggest market on the planet," he included. "Obviously that's not going to take place on day one."
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UK Betting Firms Gamble on United States After Sports Wager Ruling
Sergio Mellor edited this page 2024-12-24 20:20:34 +02:00