UK sports betting firms gamble on US after sports betting wager judgment

5 June 2018

By Natalie Sherman

Business reporter, New York

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

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

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

The changes are the first in what might become a wave of legalisation after the Supreme Court last month cleared the method for states to allow 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 monetary expert David Jennings, who heads leisure research at Davy.

For UK firms, which are coming to grips with combination, increased online competitors and harder guidelines from UK regulators, the timing is especially opportune.

Why the deals with an uncertain future

How does prohibited sports betting wagering work and what are the worries?

But the market states depending on the US remains a risky bet, as UK companies deal with complicated state-by-state regulation and competitors from entrenched regional interests.

"It's something that we're really focusing on, but similarly we do not desire to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently purchased the US fantasy sports betting website FanDuel.

'Take some time'

The US represented about 23% of the world's $244bn (₤ 182bn) in gaming revenue 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 choice, which overruled a 1992 federal law that barred states beyond Nevada and a few 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 wagering, leaving that question to regional lawmakers.
bet9ja.com
That is expected to result in significant variation in how firms get licensed, where sports betting can happen, and which events are open to speculation - with big implications for the size of the marketplace.

Potential revenue varieties from $4.2 bn to almost $20bn each year depending on factors like how lots of states relocate to legalise, Oxford Economics estimated 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 specialists KPMG.

Now, he stated: "I believe the majority of 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'."

'Remains to be seen"

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

But bookmakers face a far various landscape in America than they perform in the UK, where sports betting shops are a regular sight.
bet9ja.com
US laws limited gaming mostly to Native American lands and Nevada's Las Vegas strip till relatively just recently.

In the popular imagination, sports betting wagering has long been connected to a 1919 baseball World Series match-fixing scandal.
bit.ly
States have likewise been sluggish to legalise lots of kinds of online gambling, regardless of a 2011 Justice Department viewpoint that appeared to get rid of challenges.

While sports betting wagering is generally viewed in its own classification, "it clearly remains to be seen whether it gets the kind of momentum individuals think it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting regulation.
bit.ly
David Carruthers is the previous president of BetonSports, who was apprehended in the US in 2006 for running an overseas online sportsbook and served jail time.

Now an expert, he states UK companies must approach the market thoroughly, choosing partners with caution and preventing missteps that could result in regulator reaction.

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

'It will be partnerships'

As legalisation starts, sports betting wagering firms are lobbying to ward off high tax rates, in addition to requests by US sports betting leagues, which want to collect a portion of profits as an "stability charge".

International companies deal with the included difficulty of a powerful existing gaming industry, with gambling establishment operators, state-run lotteries and Native American tribes that are seeking to defend their grass.

Analysts state UK firms will require to strike partnerships, providing their know-how and technology in order to make inroads.

They point to SBTech's recent announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the type of offers 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 stated.

'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 considering that 2011, when it purchased 3 US companies to develop 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 threat manager for the Delaware Lottery and has actually invested millions along with a regional designer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a home name in Nevada but that's not necessarily the objective all over.

"We definitely intend to have a really significant brand existence 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 in the world," he added. "Obviously that's not going to occur on day one."

More on this story

US judgment opens way for sports betting wagering

14 May 2018

Paddy Power buys fantasy sports betting website

23 May 2018