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 firms as sports betting wagering starts to spread out in America.
From Tuesday, new rules on sports betting entered into result in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey could sports betting bets as early as Friday.
The modifications are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the way for states to enable sports betting wagering.
The market sees a "once in a generation" opportunity to develop a new market in sports betting-mad America, stated Dublin-based financial expert David Jennings, who heads leisure research at Davy.
For UK companies, which are coming to grips with consolidation, increased online competitors and harder rules from UK regulators, the timing is particularly suitable.
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But the industry says relying on the US stays a dangerous bet, as UK business face complicated state-by-state regulation and competition from established regional interests.
"It's something that we're really focusing on, however similarly we don't want to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently bought the US dream sports betting site FanDuel.
'Take some time'
The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income last year, according to a report by Technavio, external released in January.
Firms are hoping to take advantage of more of that activity after last month's decision, which struck down a 1992 federal law that barred states outside of Nevada and a couple of 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, leaving that question to regional legislators.
That is expected to result in considerable variation in how companies get accredited, where sports betting can happen, and which events are open to speculation - with huge ramifications for the size of the market.
Potential profits ranges from $4.2 bn to almost $20bn each year depending upon elements like how lots of states move to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.
"There was a great deal of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he stated: "I believe most 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 take some time'."
'Remains to be seen"
Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some form by 2023, creating a market with about $6bn in annual revenue.
But bookmakers deal with a far various landscape in America than they carry out in the UK, where wagering stores are a frequent sight.
US laws restricted gambling largely to Native American lands and Nevada's Las Vegas strip up until relatively recently.
In the popular creativity, sports betting wagering has actually long been linked to a 1919 baseball World Series match-fixing scandal.
States have actually also been sluggish to legalise numerous types of online gambling, in spite of a 2011 Justice Department opinion that appeared to get rid of challenges.
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While sports betting is generally seen in its own category, "it clearly stays to be seen whether it gets the sort of momentum people think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering policy.
David Carruthers is the former chief executive of BetonSports, who was jailed in the US in 2006 for running an overseas online sportsbook and served jail time.
Now a consultant, he states UK firms must approach the marketplace carefully, picking partners with care and avoiding missteps that could result in regulator backlash.
"This is a chance for the American sports betting wagerer ... I'm uncertain whether it is an opportunity for service," he states. "It truly depends on the result of [state] legislation and how the organization operators pursue the opportunity."
'It will be collaborations'
As legalisation starts, sports betting wagering firms are lobbying to fend off high tax rates, in addition to demands by US sports betting leagues, which want to gather a percentage of revenue as an "stability charge".
International companies face the added challenge of a powerful existing gaming market, with gambling establishment operators, state-run lotteries and Native American tribes that are looking for to safeguard their grass.
Analysts say UK firms will need to strike collaborations, offering their expertise and technology in order to make inroads.
They point to SBTech's recent announcement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.
"It will be a win-win for everybody, however it will be partnerships 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 truths.
The business has been purchasing the US market given that 2011, when it purchased three US companies to establish an existence in Nevada.
William Hill now uses about 450 people in the US and has revealed collaborations with gambling establishments in Iowa and New Jersey.
It works as danger manager for the Delaware Lottery and has invested millions along with a local designer in a New Jersey horse racing track.
Mr Asher said William Hill has actually ended up being a family name in Nevada but that's not necessarily the objective all over.
"We certainly intend to have a really significant brand name presence in New Jersey," he said. "In other states, it will just depend on guideline and potentially who our local partner is."
"The US is going to be the most significant sports betting wagering market on the planet," he added. "Obviously that's not going to take place on day one."
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wardpilgrim854 edited this page 2024-12-31 02:37:39 +08:00