UK sports betting firms bet on US after sports betting wager judgment
5 June 2018
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 wagering entered into impact in Delaware, a small east coast state about 2 hours from Washington.
Neighbouring New Jersey might begin accepting sports betting bets as early as Friday.
The modifications 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 "when in a generation" chance to develop a brand-new market in sports betting-mad America, said Dublin-based financial analyst David Jennings, who heads leisure research at Davy.
For UK firms, which are coming to grips with consolidation, increased online competitors and harder guidelines from UK regulators, the timing is especially suitable.
Why the sports betting market deals with an unpredictable future
How does illegal sports betting wagering work and what are the fears?
But the industry states relying on the US remains a dangerous bet, as UK companies face complex state-by-state policy and competitors from established local interests.
"It's something that we're actually concentrating on, however equally we don't want to overhype it," stated James Midmer, spokesperson at Paddy Power Betfair, which just recently acquired the US dream sports betting site FanDuel.
'Take some time'
The US represented about 23% of the world's $244bn (₤ 182bn) in video gaming income last year, according to a report by Technavio, external released in January.
Firms are wanting to use 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 wagering.
The judgment found the law was an over-reach of federal power. But the court it did not really legalise sports betting, leaving that concern to regional legislators.
That is expected to lead to significant variation in how firms get certified, where sports betting wagering can happen, and which events are open to speculation - with huge implications for the size of the market.
Potential income ranges from $4.2 bn to almost $20bn yearly depending on 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 big'", said Will Hawkley, London-based head of leisure for consultants KPMG.
Now, he stated: "I think many people ... are looking 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 some time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting in some type by 2023, producing a market with about $6bn in yearly income.
But bookies face a far different landscape in America than they carry out in the UK, where wagering stores are a frequent sight.
US laws restricted gambling mainly to Native American lands and Nevada's Las Vegas strip until relatively just recently.
In the popular imagination, sports betting wagering has long been linked to a 1919 baseball World Series match-fixing scandal.
States have also been slow to legalise numerous forms of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to eliminate challenges.
While sports betting is usually seen in its own classification, "it plainly stays to be seen whether it gets the type of momentum people believe 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 previous president of BetonSports, who was jailed in the US in 2006 for running an offshore online sportsbook and served prison time.
Now a specialist, he says UK companies need to approach the marketplace carefully, selecting partners with caution and avoiding errors that could result in regulator backlash.
"This is a chance for the American sports betting gambler ... I'm uncertain whether it is an opportunity for company," he says. "It actually depends on the result of [state] legislation and how business operators pursue the opportunity."
'It will be collaborations'
As legalisation starts, sports betting wagering companies are lobbying to fend off high tax rates, along with requests by US sports betting leagues, which want to collect a percentage of earnings as an "stability charge".
International business deal with the included difficulty of an effective existing video gaming industry, with gambling establishment operators, state-run lottery games and Native American tribes that are seeking to safeguard their turf.
Analysts state UK firms will require to strike collaborations, offering their expertise and innovation in order to make inroads.
They point to SBTech's recent statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind 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 simply depend'
Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.
The company has been investing in the US market because 2011, when it purchased 3 US firms to develop an existence in Nevada.
William Hill now employs about 450 individuals in the US and has actually announced collaborations with casinos in Iowa and New Jersey.
It works as danger supervisor for the Delaware Lottery and has actually invested millions together with a local designer in a New Jersey horse racing track.
Mr Asher said William Hill has ended up being a household name in Nevada however that's not always the objective all over.
"We certainly intend to have a really substantial brand presence in New Jersey," he said. "In other states, it will simply depend upon guideline and possibly who our local partner is."
"The US is going to be the most significant sports betting wagering market in the world," he added. "Obviously that's not going to happen on day one."
US judgment opens way for sports betting wagering
14 May 2018
Paddy Power buys dream sports betting site
23 May 2018
