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UK sports betting companies bet on US after sports betting wager judgment
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

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

From Tuesday, brand-new rules on wagering entered into impact in Delaware, a small east coast state about 2 hours from Washington.
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Neighbouring New Jersey could start accepting sports betting bets as early as Friday.

The changes are the first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to permit sports betting.

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

For UK companies, which are coming to grips with debt consolidation, increased online competitors and harder rules from UK regulators, the timing is especially appropriate.

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But the industry states relying on the US stays a risky bet, as UK business face complex state-by-state guideline and competitors from established regional interests.

"It's something that we're truly concentrating on, but equally we do not wish to overhype it," stated James Midmer, spokesman at Paddy Power Betfair, which recently purchased the US fantasy sports betting site FanDuel.

'Take some time'

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

Firms are wanting 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.

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

That is anticipated to cause substantial variation in how companies get accredited, where sports betting can occur, and which occasions 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 upon factors like the number of states relocate to legalise, Oxford Economics estimated 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 specialists KPMG.

Now, he stated: "I believe the majority of people ... are taking a look 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 take time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting wagering in some type by 2023, creating a market with about $6bn in annual income.

But bookies face a far different landscape in America than they do in the UK, where wagering stores are a frequent sight.
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US laws restricted gaming mainly to Native American lands and Nevada's Las Vegas strip till relatively just recently.

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

States have also been sluggish to legalise numerous forms of online gaming, in spite of a 2011 Justice Department opinion that appeared to remove barriers.

While sports betting wagering is usually seen in its own classification, "it plainly stays to be seen whether it gets the kind of momentum people think it will," said Keith Miller, law teacher at Drake University and co-author of a book about sports betting policy.

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

Now a consultant, he says UK firms need to approach the market thoroughly, picking partners with care and avoiding missteps that could result in regulator reaction.

"This is an opportunity for the American sports betting bettor ... I'm unsure whether it is a chance for company," he states. "It truly 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, in addition to demands by US sports betting leagues, which wish to gather a percentage of profits as an "integrity charge".

International companies deal with the added difficulty of an effective existing gaming market, with gambling establishment operators, state-run lottos and Native American people that are seeking to safeguard their grass.

Analysts state UK firms will need to strike partnerships, offering their competence and innovation in order to make inroads.

They point to SBTech's recent announcement that it is offering technology for Kentucky Derby operator Churchill Downs as an example of the type of deals likely to materialise.
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"It will be a win-win for everybody, however it will be collaborations and it will be driven by technology," Mr Hawkley stated.

'It will just depend'

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

The company has been buying the US market because 2011, when it purchased three US companies to develop a presence in Nevada.

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

It works as threat manager for the Delaware Lottery and has actually invested millions alongside a local designer in a New Jersey horse racing track.

Mr Asher said William Hill has actually become a family name in Nevada but that's not always the objective everywhere.

"We definitely intend to have an extremely significant brand existence in New Jersey," he said. "In other states, it will simply depend on 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 the first day."

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