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UK sports betting companies bet on US after sports betting wager ruling

5 June 2018

By Natalie Sherman
bet9ja.com
Business press reporter, New york city
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It's high stakes for UK companies as sports betting wagering starts to spread out in America.

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

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

The changes are the very 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 industry sees a "once in a generation" chance to develop a new market in sports betting-mad America, stated Dublin-based monetary analyst David Jennings, who heads leisure research study at Davy.

For UK companies, which are facing combination, increased online competitors and harder guidelines from UK regulators, the timing is especially appropriate.

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But the market says relying on the US stays a risky bet, as UK business deal with complicated state-by-state guideline and competition from entrenched regional interests.

"It's something that we're actually concentrating on, however similarly we don't wish to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which recently acquired the US dream sports betting site FanDuel.

'Take some time'

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

Firms are wanting to use more of that activity after last month's choice, which overruled a 1992 federal law that barred states outside of Nevada and a couple of others from authorising sports betting.

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

That is anticipated to cause significant variation in how firms get accredited, where sports betting wagering can happen, and which occasions are open to speculation - with big ramifications for the size of the marketplace.

Potential revenue varieties from $4.2 bn to practically $20bn annually depending on aspects like the number of states relocate to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.

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

Now, he stated: "I think the majority of people ... are taking a look 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, handling director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in annual profits.

But bookies face a far different landscape in America than they perform in the UK, where wagering stores are a regular sight.

US laws minimal sports betting mainly to Native American lands and Nevada's Las Vegas strip 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 lots of kinds of online sports betting, despite a 2011 Justice Department viewpoint that appeared to eliminate challenges.

While sports betting is usually viewed in its own category, "it clearly stays to be seen whether it gets the sort of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering regulation.

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

Now a specialist, he says UK companies need to approach the market thoroughly, picking partners with care and preventing bad moves that might lead to regulator backlash.

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

'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 income as an "integrity cost".

International business deal with the added challenge of an effective existing video gaming market, with gambling establishment operators, state-run lotteries and Native American tribes that are seeking to safeguard their turf.

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

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

"It will be a win-win for everyone, but it will be partnerships and it will be driven by technology," Mr Hawkley said.

'It will simply depend'

Joe Asher, president at William Hill US, is clear-eyed about the truths.

The company has been investing in the US market because 2011, when it bought three US companies to establish an existence in Nevada.

William Hill now employs about 450 people in the US and has actually announced collaborations with casinos in Iowa and New Jersey.

It works as risk supervisor for the Delaware Lottery and has actually invested millions along with a local designer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually ended up being a household name in Nevada but that's not necessarily the goal all over.

"We certainly plan to have a very substantial brand name presence in New Jersey," he stated. "In other states, it will just depend on regulation and possibly who our local partner is."

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