UK wagering firms gamble on US after sports betting wager ruling
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5 June 2018
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It's high stakes for UK companies as sports betting starts to spread out in America.
From Tuesday, new rules on sports betting entered into effect in Delaware, a small east coast state about two hours from Washington.
Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.
The changes are the very 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.
The market sees a "when in a generation" chance to establish a brand-new market in sports betting-mad America, said Dublin-based monetary expert David Jennings, who heads leisure research at Davy.
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For UK companies, which are coming to grips with consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is especially opportune.
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But the industry says relying on the US stays 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 concentrating on, however similarly we don't wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which just recently purchased the US fantasy sports betting website FanDuel.
'Take time'
The US accounted for 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 take advantage of more of that activity after last month's choice, which struck down 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 lawmakers.
That is anticipated to lead to considerable variation in how companies get accredited, where sports betting wagering can happen, and which occasions are open to speculation - with huge implications for the size of the market.
Potential profits ranges from $4.2 bn to almost $20bn annually depending upon aspects like the number of states transfer to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.
"There was a great deal of 'this is going to be substantial'", said Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he said: "I think the majority of people ... 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 some time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting in some type by 2023, producing a market with about $6bn in yearly earnings.
But bookies face a far different landscape in America than they do in the UK, where sports betting shops are a frequent sight.
US laws restricted gaming mostly to Native American lands and Nevada's Las Vegas strip until fairly just recently.
In the popular imagination, sports betting wagering has actually long been linked to a 1919 baseball World Series match-fixing scandal.
States have also been slow to legalise lots of kinds of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to eliminate obstacles.
While sports betting wagering is usually viewed in its own classification, "it plainly stays to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting wagering guideline.
David Carruthers is the former chief executive of BetonSports, who was detained in the US in 2006 for running an offshore online sportsbook and served jail time.
Now a consultant, he says UK companies need to approach the marketplace thoroughly, choosing partners with caution and avoiding mistakes that could lead to regulator backlash.
"This is a chance for the American sports betting gambler ... I'm not exactly sure whether it is a chance for service," he says. "It actually depends on the outcome of [state] legislation and how the business operators pursue the chance."
'It will be partnerships'
As legalisation starts, sports betting companies are lobbying to fend off high tax rates, as well as requests by US sports betting leagues, which want to gather a percentage of income as an "integrity cost".
International companies deal with the added obstacle of a powerful existing gaming market, with casino operators, state-run lotteries and Native American people that are looking for to defend their turf.
Analysts state UK companies will require to strike collaborations, providing their proficiency and technology in order to make inroads.
They indicate SBTech's recent statement that it is providing technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers most likely to materialise.
"It will be a win-win for everybody, but it will be collaborations and it will be driven by technology," Mr Hawkley stated.
'It will just depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.
The company has been buying the US market because 2011, when it acquired 3 US firms to develop an existence in Nevada.
William Hill now employs about 450 people in the US and has actually announced collaborations with gambling establishments in Iowa and New Jersey.
It works as risk supervisor for the Delaware Lottery and has invested millions together with a local developer 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 definitely intend to have an extremely substantial brand name existence in New Jersey," he said. "In other states, it will simply depend on policy and possibly who our local partner is."
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"The US is going to be the greatest sports betting wagering market in the world," he included. "Obviously that's not going to take place on the first day."
US ruling opens method for sports betting wagering
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UK Betting Firms Gamble on uS After Sports Wager Ruling
Charity Cabral edited this page 2025-01-06 13:18:52 +08:00