UK wagering firms gamble on US after sports betting wager ruling

5 June 2018
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By Natalie Sherman

Business press reporter, New York
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It's high stakes for UK companies as sports betting wagering starts to spread out in America.

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

The modifications 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 allow sports betting.

The industry sees a "as soon as in a generation" chance to develop a brand-new market in sports betting-mad America, stated Dublin-based financial 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 opportune.

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But the market says counting on the US remains a risky bet, as UK companies deal with complex state-by-state policy and competitors from established regional interests.

"It's something that we're really focusing on, however equally we do not want to overhype it," said James Midmer, spokesperson at Paddy Power Betfair, which just recently purchased the US dream sports betting website FanDuel.

'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 wishing to use more of that activity after last month's choice, which overruled a 1992 federal law that disallowed states beyond 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 actually legalise sports betting, leaving that question to local lawmakers.

That is expected to result in significant variation in how firms get accredited, where sports betting can happen, and which events are open to speculation - with huge implications for the size of the marketplace.

Potential income varieties from $4.2 bn to nearly $20bn each year depending on factors like the number of states transfer 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 huge'", said Will Hawkley, London-based head of for specialists KPMG.

Now, he stated: "I believe the majority of people ... are looking 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 some time'."

'Remains to be seen"

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

But bookmakers face a far different landscape in America than they perform in the UK, where betting shops are a regular sight.

US laws limited sports betting mainly to Native American lands and Nevada's Las Vegas strip till relatively recently.

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

States have actually likewise been sluggish to legalise lots of kinds of online sports betting, despite a 2011 Justice Department viewpoint that appeared to get rid of obstacles.

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

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 an expert, he states UK firms should approach the market thoroughly, picking partners with caution and avoiding bad moves that might result in regulator backlash.

"This is a chance for the American sports betting gambler ... I'm not exactly sure whether it is an opportunity for organization," he says. "It actually is reliant on the result of [state] legislation and how business operators pursue the opportunity."

'It will be partnerships'

As legalisation begins, sports betting wagering firms are lobbying to fend off high tax rates, along with demands by US sports betting leagues, which wish to collect a percentage of income as an "stability cost".

International business deal with the added challenge of an effective existing video gaming market, with gambling establishment operators, state-run lotteries and Native American people that are looking for to protect their grass.

Analysts say UK companies will need to strike collaborations, using their competence and innovation in order to make inroads.

They point to 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 everyone, however it will be collaborations and it will be driven by innovation," Mr Hawkley stated.

'It will simply depend'

Joe Asher, chief executive at William Hill US, is clear-eyed about the truths.
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The company has actually been buying the US market because 2011, when it purchased three US companies to develop an existence in Nevada.

William Hill now uses about 450 people in the US and has actually 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 local designer in a New Jersey horse racing track.

Mr Asher said William Hill has become a home name in Nevada however that's not always the goal all over.

"We certainly plan to have an extremely considerable brand presence in New Jersey," he said. "In other states, it will simply depend upon regulation and possibly who our regional partner is."

"The US is going to be the greatest sports betting wagering market worldwide," he added. "Obviously that's not going to occur on the first day."

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