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UK wagering companies gamble on US after sports betting wager judgment
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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 firms as sports betting wagering starts to spread out in America.

From Tuesday, brand-new rules on wagering came into impact in Delaware, a tiny east coast state about 2 hours from Washington.

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

The modifications are the very first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting.

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

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

Why the gambling market faces an uncertain future

How does prohibited sports betting work and what are the fears?

But the market states depending on the US stays a risky bet, as UK business deal with complex state-by-state policy and competitors from entrenched regional interests.

"It's something that we're really focusing on, but similarly we don't wish to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which just recently the US fantasy sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming revenue last year, according to a report by Technavio, external released in January.

Firms are hoping to tap into more of that activity after last month's choice, which overruled a 1992 federal law that barred states outside of Nevada and a few others from authorising sports betting.

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

That is anticipated to cause significant variation in how firms get certified, where sports betting wagering can occur, and which occasions are open to speculation - with big implications for the size of the market.

Potential income ranges from $4.2 bn to practically $20bn every year depending on aspects like the number of states transfer to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

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

Now, he stated: "I believe many people ... are taking a look at this as, 'it's a chance but 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, predicts that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in annual profits.

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

US laws limited gaming largely to Native American lands and Nevada's Las Vegas strip until fairly 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 many forms of online gaming, despite a 2011 Justice Department opinion that appeared to get rid of barriers.
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While sports betting wagering is normally viewed in its own category, "it plainly stays to be seen whether it gets the sort of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering guideline.

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

Now an expert, he states UK firms must approach the market carefully, selecting partners with care and preventing errors that could result in regulator backlash.

"This is an opportunity for the American sports betting wagerer ... I'm not exactly sure 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 demands by US sports betting leagues, which want to collect a percentage of income as an "integrity cost".

International companies face the added obstacle of a powerful existing gaming industry, with casino operators, state-run lottos and Native American tribes that are looking for to defend their turf.

Analysts state UK firms will require to strike collaborations, offering their competence and technology in order to make inroads.

They indicate SBTech's current statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the type of deals likely to materialise.

"It will be a win-win for everyone, but it will be partnerships and it will be driven by technology," Mr Hawkley stated.

'It will simply depend'

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

The company has been investing in the US market considering that 2011, when it purchased 3 US companies to establish an existence in Nevada.

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

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

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

"We definitely plan to have a very considerable brand name presence in New Jersey," he stated. "In other states, it will simply depend upon guideline and potentially 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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