UK sports betting companies gamble on US after sports betting wager ruling
5 June 2018

By Natalie Sherman
Business press reporter, New York
It's high stakes for UK firms as sports betting starts to spread out in America.
From Tuesday, brand-new rules on sports betting entered effect in Delaware, a small east coast state about 2 hours from Washington.
Neighbouring New Jersey might start accepting sports betting bets as early as Friday.
The changes are the first in what could end up being a wave of legalisation after the Supreme Court last month cleared the method for states to enable sports betting wagering.
The industry sees a "once in a generation" chance to establish a new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research study at Davy.
For UK companies, which are coming to grips with debt consolidation, increased online competitors and harder guidelines from UK regulators, the timing is especially appropriate.
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But the market says depending on the US remains a dangerous bet, as UK companies deal with complex state-by-state guideline and competitors from established local interests.
"It's something that we're truly focusing on, however equally we don't desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which just recently bought the US dream sports betting site FanDuel.
'Take time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming income last year, according to a report by Technavio, external published in January.
Firms are hoping to take advantage of more of that activity after last month's choice, which struck down a 1992 federal law that barred states beyond Nevada and a couple of others from authorising sports betting wagering.
The ruling discovered the law was an over-reach of federal power. But the court it did not in fact legalise sports betting, leaving that concern to local lawmakers.
That is anticipated to lead to significant variation in how companies get licensed, where sports betting can occur, and which occasions are open to speculation - with huge implications for the size of the market.
Potential earnings ranges from $4.2 bn to nearly $20bn annually depending on factors like the number of states move to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.
"There was a great deal of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he stated: "I believe the majority of individuals ... 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, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some kind by 2023, creating a market with about $6bn in annual income.

But bookies deal with a far different landscape in America than they perform in the UK, where wagering shops are a regular sight.
US laws restricted sports betting mostly to Native American lands and Nevada's Las Vegas strip up until relatively just recently.
In the popular imagination, sports betting has long been linked to a 1919 baseball World Series match-fixing scandal.
States have also been slow to legalise numerous forms of online sports betting, in spite of a 2011 Justice Department opinion that appeared to eliminate barriers.
While sports betting wagering is normally viewed in its own category, "it plainly remains to be seen whether it gets the type of momentum people believe it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting guideline.
David Carruthers is the previous president of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served prison time.
Now a specialist, he states UK companies ought to approach the market carefully, picking partners with caution and preventing mistakes that might cause regulator reaction.
"This is a chance for the American sports betting bettor ... I'm not exactly sure whether it is a chance for service," he states. "It truly is reliant on the result of [state] legislation and how the business operators pursue the chance."
'It will be partnerships'
As legalisation starts, sports betting wagering companies are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which wish to collect a percentage of profits as an "stability charge".
International business face the added obstacle of an effective existing gaming industry, with gambling establishment operators, state-run lottery games and Native American people that are seeking to protect their turf.
Analysts state UK firms will require to strike collaborations, providing their proficiency and technology in order to make inroads.
They indicate SBTech's recent announcement that it is providing innovation for Kentucky Derby operator Churchill Downs as an example of the type of offers likely to materialise.
"It will be a win-win for everybody, however it will be collaborations and it will be driven by innovation," Mr Hawkley said.
'It will simply depend'

Joe Asher, president at William Hill US, is clear-eyed about the realities.
The business has actually been buying the US market since 2011, when it acquired three US firms to establish an existence in Nevada.
William Hill now uses about 450 people in the US and has actually announced partnerships with casinos in Iowa and New Jersey.
It works as risk supervisor 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 goal all over.
"We definitely plan to have a very significant brand name presence in New Jersey," he said. "In other states, it will simply depend on regulation and possibly who our regional partner is."
"The US is going to be the greatest sports betting betting market worldwide," he added. "Obviously that's not going to happen on the first day."
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