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 wagering starts to spread in America.
From Tuesday, brand-new rules on wagering came into impact in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.
The modifications are the first in what might become a wave of legalisation after the Supreme Court last month cleared the way for states to permit sports betting.
The market sees a "as soon as in a generation" chance to establish a new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research at Davy.
For UK firms, which are grappling with combination, increased online competitors and tougher rules from UK regulators, the timing is especially appropriate.
Why the gambling industry faces an uncertain future
How does illegal sports betting work and what are the fears?
But the industry states depending on the US stays a risky bet, as UK business face complex state-by-state guideline and competitors from established regional interests.
"It's something that we're truly focusing on, however similarly we don't wish to overhype it," said James Midmer, spokesperson 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 video gaming earnings last year, according to a report by Technavio, external published in January.
Firms are wanting to tap into more of that activity after last month's decision, which overruled a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.
The ruling 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 regional lawmakers.
That is expected to result in significant variation in how firms get accredited, where sports betting can occur, and which events are open to speculation - with big implications for the size of the market.
Potential income ranges from $4.2 bn to practically $20bn each year depending on aspects like the number of states transfer to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.
"There was a lot of 'this is going to be big'", stated Will Hawkley, London-based head of leisure for experts KPMG.
Now, he said: "I think many people ... are looking at this as, 'it's an opportunity but it's not going to be $20bn and it's going to be state by state and it's going to take some time'."
'Remains to be seen"
Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some form by 2023, developing a market with about $6bn in annual revenue.
But bookmakers deal with a far various landscape in America than they do in the UK, where sports betting 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 also been sluggish to legalise many kinds of online gambling, despite a 2011 Justice Department opinion that appeared to remove barriers.
While sports betting is typically viewed in its own classification, "it plainly remains to be seen whether it gets the sort of momentum people believe 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 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 marketplace thoroughly, selecting partners with caution and preventing mistakes that could result in regulator backlash.
"This is an opportunity for the American sports betting gambler ... I'm not sure whether it is a chance for organization," he states. "It actually depends on the result of [state] legislation and how the service operators pursue the opportunity."
'It will be partnerships'
As legalisation starts, sports betting firms are lobbying to ward off high tax rates, as well as demands by US sports betting leagues, which desire to collect a percentage of income as an "stability charge".
International companies deal with the included challenge of a powerful existing video gaming market, with casino operators, state-run lottery games and Native American people that are seeking to protect their turf.
Analysts say UK companies will require to strike partnerships, offering their knowledge and technology in order to make inroads.
They point to SBTech's current statement that it is providing innovation for Kentucky Derby operator Churchill Downs as an example of the kind of offers most likely to materialise.
"It will be a win-win for everybody, but it will be partnerships and it will be driven by technology," Mr Hawkley said.
'It will just depend'
Joe Asher, president at William Hill US, is clear-eyed about the truths.
The business has actually been investing in the US market since 2011, when it purchased three US firms to develop a presence in Nevada.
William Hill now employs about 450 individuals in the US and has announced partnerships with gambling establishments in Iowa and New Jersey.
It works as risk 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 ended up being a household name in Nevada but that's not necessarily the goal all over.
"We definitely mean to have a very substantial brand presence in New Jersey," he said. "In other states, it will just depend upon guideline and potentially who our regional partner is."
"The US is going to be the greatest sports betting wagering market in the world," he added. "Obviously that's not going to happen on day one."
US judgment opens way for sports betting
14 May 2018
Paddy Power purchases fantasy sports betting site
23 May 2018
