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UK wagering companies gamble 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 .

From Tuesday, new rules on wagering came into effect in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey could begin accepting sports betting bets as early as Friday.

The modifications are the first in what might become a wave of legalisation after the Supreme Court last month cleared the way for states to allow sports betting.

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

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

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But the market states depending on the US remains a dangerous bet, as UK companies face complex state-by-state regulation and competition from established regional interests.

"It's something that we're truly focusing on, however equally we do not wish to overhype it," stated James Midmer, representative at Paddy Power Betfair, which recently acquired the US fantasy sports betting website FanDuel.
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'Take time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in gaming income last year, according to a report by Technavio, external released in January.

Firms are intending to tap into more of that activity after last month's choice, which struck down a 1992 federal law that barred states outside of Nevada and a couple of 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 wagering, leaving that question to local legislators.

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

Potential income ranges from $4.2 bn to practically $20bn every year depending on factors like the number of states relocate to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

"There was a lot of 'this is going to be huge'", stated Will Hawkley, London-based head of leisure for experts KPMG.

Now, he said: "I believe many people ... are taking a look at this as, 'it's an opportunity however 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, forecasts that 32 states will legalise sports betting in some type by 2023, producing a market with about $6bn in annual earnings.

But bookmakers face a far various landscape in America than they carry out in the UK, where wagering shops are a frequent sight.
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US laws minimal gaming mostly to Native American lands and Nevada's Las Vegas strip until reasonably just recently.

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

States have actually likewise been sluggish to legalise numerous types of online gaming, in spite of a 2011 Justice Department viewpoint that appeared to remove obstacles.

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

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

Now an expert, he says UK companies need to approach the market thoroughly, choosing partners with caution and preventing errors that might lead to regulator backlash.

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

'It will be collaborations'

As legalisation begins, sports betting companies are lobbying to ward off high tax rates, in addition to demands by US sports betting leagues, which wish to gather a portion of revenue as an "stability cost".

International business face the added challenge of an effective existing gaming market, with gambling establishment operators, state-run lottos and Native American people that are seeking to protect their turf.

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

They indicate SBTech's recent announcement that it is offering 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 everyone, but it will be collaborations 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 realities.

The company has actually been investing in the US market since 2011, when it bought three US firms to establish a presence in Nevada.

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

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

Mr Asher said William Hill has actually become a household name in Nevada however that's not necessarily the goal all over.
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"We definitely plan to have an extremely significant brand presence in New Jersey," he stated. "In other states, it will simply depend on policy and possibly who our local partner is."

"The US is going to be the greatest sports betting market in the world," he included. "Obviously that's not going to happen on the first day."

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