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UK wagering firms bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, new guidelines on wagering entered impact in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey could 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 enable sports betting wagering.

The industry sees a "when in a generation" opportunity to establish a new market in sports betting-mad America, stated Dublin-based monetary expert David Jennings, who heads leisure research at Davy.

For UK firms, which are facing combination, increased online competition and harder rules from UK regulators, the timing is especially suitable.

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But the market states depending on the US remains a risky bet, as UK companies deal with complex state-by-state policy and competition from established regional interests.

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

'Require time'

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

Firms are wanting to use 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 wagering.

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

That is expected to result in significant variation in how companies get certified, where sports betting can happen, and which occasions are open to speculation - with huge implications for the size of the market.

Potential income ranges from $4.2 bn to nearly $20bn each year depending upon factors like the number of states transfer to legalise, Oxford Economics approximated in a 2017 research study for the American Gaming Association.

"There was a lot of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he said: "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 take time'."

'Remains to be seen"

Chris Grove, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some kind by 2023, producing a market with about $6bn in annual revenue.

But bookmakers deal with a far different landscape in America than they do in the UK, where sports betting shops are a regular sight.

US laws restricted gaming largely to Native American lands and Nevada's Las Vegas strip until relatively just recently.

In the popular imagination, sports betting wagering has actually long been linked to a 1919 baseball World Series match-fixing scandal.
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States have actually likewise been sluggish to legalise many forms of online sports betting, despite a 2011 Justice Department viewpoint that appeared to eliminate obstacles.

While sports betting is typically seen in its own category, "it plainly remains to be seen whether it gets the sort of momentum individuals think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting policy.

David Carruthers is the former president of BetonSports, who was apprehended in the US in 2006 for running an offshore online sportsbook and served prison time.

Now a consultant, he states UK firms need to approach the market thoroughly, picking partners with care and preventing missteps that could lead to regulator reaction.

"This is a chance for the American sports betting wagerer ... I'm unsure whether it is a chance for organization," he states. "It actually is reliant on the result of [state] legislation and how business operators pursue the chance."

'It will be collaborations'

As legalisation starts, sports betting wagering companies are lobbying to ward off high tax rates, as well as requests by US sports betting leagues, which wish to gather a portion of revenue as an "stability fee".

International business face the included difficulty of a powerful existing video gaming market, with gambling establishment operators, state-run lottos and Native American people that are looking for to safeguard their turf.

Analysts state UK companies will need to strike partnerships, offering their competence and technology in order to make inroads.

They point to SBTech's recent statement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the kind of deals most likely to materialise.

"It will be a for everybody, however it will be collaborations and it will be driven by innovation," Mr Hawkley said.

'It will just 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 considering that 2011, when it bought 3 US companies to establish a presence in Nevada.

William Hill now employs about 450 people 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 alongside a local 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 certainly intend to have a very significant brand name presence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our regional partner is."

"The US is going to be the biggest sports betting wagering market worldwide," he included. "Obviously that's not going to take place on the first day."

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