UK wagering firms bet on US after sports betting wager judgment
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5 June 2018

By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, new guidelines on sports betting entered effect 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 first in what could become a wave of legalisation after the Supreme Court last month cleared the way for states to permit sports betting.
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The industry sees a "when 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 study at Davy.

For UK firms, which are grappling with debt consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is particularly appropriate.

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But the industry states counting on the US remains a dangerous bet, as UK companies deal with complicated state-by-state policy and competition from entrenched regional interests.

"It's something that we're actually focusing on, however similarly we do not wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which just recently bought the US dream sports betting website FanDuel.

'Require 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 released in January.

Firms are wishing to tap into more of that activity after last month's choice, which struck down a 1992 federal law that disallowed states beyond Nevada and a couple of others from authorising sports betting wagering.
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The judgment found 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 lead to substantial variation in how companies get accredited, where sports betting can occur, and which occasions are open to speculation - with huge ramifications for the size of the marketplace.

ranges from $4.2 bn to almost $20bn annually depending on factors like the number of states relocate to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.
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"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 think many 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'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, forecasts that 32 states will legalise sports betting wagering in some type by 2023, creating a market with about $6bn in annual revenue.
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But bookmakers deal with a far various landscape in America than they do in the UK, where wagering stores are a regular sight.

US laws limited gambling largely to Native American lands and Nevada's Las Vegas strip until fairly just recently.

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

States have also been sluggish to legalise lots of types of online sports betting, regardless of a 2011 Justice Department viewpoint that appeared to eliminate barriers.

While sports betting wagering is usually seen in its own classification, "it plainly stays to be seen whether it gets the type of momentum individuals think 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 chief executive of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served jail time.

Now an expert, he states UK companies need to approach the market carefully, picking partners with caution and preventing missteps that might result in regulator reaction.

"This is an opportunity for the American sports betting wagerer ... I'm uncertain whether it is an opportunity for organization," he states. "It truly depends on the result of [state] legislation and how the service operators pursue the chance."

'It will be collaborations'

As legalisation begins, sports betting firms are lobbying to fend off high tax rates, in addition to requests by US sports betting leagues, which wish to gather a percentage of revenue as an "integrity charge".

International business deal with the added difficulty of a powerful existing video gaming market, with gambling establishment operators, state-run lotteries and Native American people that are looking for to safeguard their grass.

Analysts state UK companies will require to strike partnerships, using their expertise and innovation in order to make inroads.

They indicate SBTech's current announcement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the sort of deals likely to materialise.

"It will be a win-win for everyone, 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 realities.

The company has actually been purchasing the US market because 2011, when it acquired three US firms to develop an existence in Nevada.

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

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

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

"We definitely mean to have a very substantial brand name presence in New Jersey," he stated. "In other states, it will just depend upon guideline and potentially who our regional partner is."

"The US is going to be the biggest sports betting wagering market on the planet," he added. "Obviously that's not going to take place on day one."

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