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UK wagering firms gamble on US after sports betting wager judgment
bet9ja.com
5 June 2018

By Natalie Sherman
bet9ja.com
Business reporter, New York

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

From Tuesday, new guidelines on sports betting came into impact in Delaware, a tiny east coast state about two hours from Washington.
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Neighbouring New Jersey could start 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 permit sports betting.

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

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

Why the gaming market faces an unsure future

How does unlawful sports betting wagering work and what are the fears?

But the market says counting on the US remains a risky bet, as UK business deal with complex state-by-state regulation and competitors from established local interests.

"It's something that we're truly focusing on, but similarly we don't wish to overhype it," said James Midmer, spokesperson at Betfair, which just recently purchased the US dream sports betting website FanDuel.

'Take some time'

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

Firms are wanting 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 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 actually legalise sports betting wagering, leaving that concern to local lawmakers.

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

Potential revenue varieties from $4.2 bn to almost $20bn annually depending on elements like the number of states relocate 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 huge'", said Will Hawkley, London-based head of leisure for specialists KPMG.

Now, he stated: "I think many individuals ... 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 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, creating a market with about $6bn in annual profits.

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

US laws limited gaming mainly to Native American lands and Nevada's Las Vegas strip until reasonably recently.

In the popular imagination, sports betting has long been connected to a 1919 baseball World Series match-fixing scandal.

States have likewise been slow to legalise numerous kinds of online gaming, despite a 2011 Justice Department opinion that appeared to eliminate challenges.

While sports betting wagering is usually viewed in its own classification, "it clearly remains to be seen whether it gets the sort of momentum individuals believe 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 primary executive of BetonSports, who was arrested in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a consultant, he says UK companies ought to approach the market carefully, choosing partners with care and preventing errors that could lead to regulator backlash.

"This is a chance for the American sports betting gambler ... I'm not exactly sure whether it is an opportunity for service," he says. "It truly is dependent on the outcome of [state] legislation and how the organization operators pursue the opportunity."

'It will be partnerships'
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As legalisation begins, sports betting firms are lobbying to fend off high tax rates, in addition to demands by US sports betting leagues, which wish to collect a percentage of earnings as an "integrity fee".

International business face the added challenge of a powerful existing video gaming industry, with gambling establishment operators, state-run lottery games and Native American people that are seeking to safeguard their turf.

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

They point to SBTech's current announcement that it is supplying innovation 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, however it will be partnerships and it will be driven by innovation," Mr Hawkley said.

'It will just depend'

Joe Asher, chief executive at William Hill US, is clear-eyed about the realities.

The business has actually been purchasing the US market since 2011, when it acquired three US companies to develop a presence in Nevada.

William Hill now uses about 450 people in the US and has revealed collaborations with casinos in Iowa and New Jersey.

It works as danger supervisor for the Delaware Lottery and has actually invested millions alongside a regional developer in a New Jersey horse racing track.

Mr Asher stated William Hill has ended up being a household name in Nevada however that's not always the objective everywhere.

"We definitely plan to have a really considerable brand presence in New Jersey," he stated. "In other states, it will simply depend upon regulation and possibly who our local 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."

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