UK Betting Firms Gamble On United States After Sports Wager Ruling

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UK wagering firms bet on US after sports betting wager judgment


5 June 2018
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By Natalie Sherman


Business press reporter, New York


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


From Tuesday, new guidelines on betting came into impact in Delaware, a tiny 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 could become a wave of legalisation after the Supreme Court last month cleared the way for states to permit sports betting wagering.


The industry sees a "as soon as in a generation" opportunity to develop a brand-new market in sports betting-mad America, said expert David Jennings, who heads leisure research study at Davy.


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


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But the market says counting on the US remains a dangerous bet, as UK companies face complicated state-by-state regulation and competitors from entrenched local interests.


"It's something that we're really focusing on, but equally we do not want to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting site FanDuel.


'Take time'


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


Firms are wishing 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 few others from authorising sports betting.


The ruling discovered the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that question to regional lawmakers.


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


Potential income varieties from $4.2 bn to nearly $20bn every year depending upon elements like how many states transfer 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 big'", said Will Hawkley, London-based head of leisure for experts KPMG.


Now, he stated: "I think the majority of people ... are looking 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 require time'."
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'Remains to be seen"


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


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


US laws restricted sports betting largely to Native American lands and Nevada's Las Vegas strip till fairly recently.


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


States have also been sluggish to legalise lots of forms of online gambling, regardless of a 2011 Justice Department opinion that appeared to get rid of challenges.


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


David Carruthers is the former president of BetonSports, who was apprehended in the US in 2006 for running an offshore online sportsbook and served jail time.


Now a specialist, he states UK firms ought to approach the market thoroughly, picking partners with care and avoiding errors that might result in regulator reaction.


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


'It will be partnerships'


As legalisation starts, sports betting companies are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which want to collect a portion of revenue as an "integrity cost".


International companies deal with the added obstacle of an effective existing gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to safeguard their grass.


Analysts state UK companies will require to strike collaborations, using their know-how and innovation in order to make inroads.


They indicate SBTech's current statement that it is supplying innovation 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 technology," Mr Hawkley said.


'It will just depend'


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


The company has been purchasing the US market given that 2011, when it bought three US companies to develop a presence in Nevada.
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William Hill now employs about 450 individuals in the US and has announced collaborations with casinos in Iowa and New Jersey.


It works as threat supervisor for the Delaware Lottery and has invested millions along with a regional developer in a New Jersey horse racing track.


Mr Asher stated William Hill has ended up being a home name in Nevada however that's not necessarily the goal everywhere.


"We certainly plan to have a very substantial brand name presence in New Jersey," he stated. "In other states, it will simply depend upon regulation and potentially who our regional partner is."


"The US is going to be the most significant sports betting wagering market in the world," he included. "Obviously that's not going to take place on day one."


More on this story


US ruling opens way for sports betting


14 May 2018


Paddy Power purchases fantasy sports betting website


23 May 2018
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