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UK betting companies gamble on US after sports betting wager judgment
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5 June 2018
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By Natalie Sherman

Business press reporter, New York

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

From Tuesday, brand-new guidelines on sports betting came into impact in Delaware, a small east coast state about 2 hours from Washington.

Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.

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

The market sees a "once in a generation" chance to develop a 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 coming to grips with consolidation, increased online competitors and tougher rules from UK regulators, the timing is particularly opportune.

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But the industry states depending on the US stays a dangerous bet, as UK business face complicated state-by-state policy and competition from entrenched regional interests.

"It's something that we're truly focusing on, however equally we don't desire to overhype it," stated James Midmer, at Paddy Power Betfair, which recently bought the US dream sports betting website FanDuel.

'Take time'

The US represented about 23% of the world's $244bn (₤ 182bn) in gaming earnings in 2015, according to a report by Technavio, external published in January.

Firms are intending to tap into more of that activity after last month's decision, which struck down a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports betting.

The ruling 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 regional legislators.

That is anticipated to lead to considerable variation in how firms get accredited, where sports betting can occur, and which occasions are open to speculation - with huge ramifications for the size of the marketplace.

Potential revenue varieties from $4.2 bn to almost $20bn each year depending upon aspects like how lots of states move to legalise, Oxford Economics approximated 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 experts KPMG.

Now, he stated: "I think many people ... are taking a look 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 require time'."
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'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting in some type by 2023, producing a market with about $6bn in yearly profits.

But bookies face a far different landscape in America than they carry out in the UK, where sports betting shops are a regular sight.

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

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

States have also been sluggish to legalise many kinds of online gaming, despite a 2011 Justice Department opinion that appeared to get rid of challenges.

While sports betting is normally seen in its own category, "it plainly stays to be seen whether it gets the sort of momentum people believe it will," stated Keith Miller, law professor at Drake University and co-author of a book about sports betting wagering policy.

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

Now an expert, he states UK firms should approach the marketplace thoroughly, choosing partners with care and avoiding errors that might cause regulator reaction.

"This is an opportunity for the American sports betting wagerer ... I'm unsure whether it is an opportunity for service," he says. "It truly depends on the outcome of [state] legislation and how the service operators pursue the chance."

'It will be collaborations'

As legalisation starts, sports betting wagering firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which desire to gather a portion of revenue as an "integrity cost".
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International business face the added challenge of a powerful existing video gaming industry, with casino operators, state-run lottery games and Native American tribes that are seeking to defend their turf.

Analysts say UK firms will need to strike collaborations, using their competence and technology in order to make inroads.

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

"It will be a win-win for everyone, but 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.
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The business has been buying the US market given that 2011, when it bought three US companies to establish a presence in Nevada.

William Hill now employs about 450 people in the US and has announced 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 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 always the goal all over.

"We certainly intend to have a really significant brand name presence in New Jersey," he stated. "In other states, it will just depend upon regulation and possibly who our local partner is."

"The US is going to be the most significant sports betting market on the planet," he included. "Obviously that's not going to occur on the first day."

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