UK Betting Firms Gamble On US After Sports Wager Ruling
bit.ly
It's high stakes for UK firms as sports betting starts to spread out in America.
From Tuesday, new rules on wagering came into effect in Delaware, a small east coast state about 2 hours from Washington.
Neighbouring New Jersey might begin accepting sports bets as early as Friday.
The modifications are the first in what could end up being a wave of legalisation after the Supreme Court last month cleared the way for states to permit sports wagering.
The industry sees a "once in a generation" opportunity 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 grappling with combination, increased online competitors and tougher guidelines from UK regulators, the timing is particularly appropriate.
Why the betting market deals with an uncertain future
How does illegal sports wagering work and what are the fears?
But the industry says counting on the US stays a dangerous bet, as UK business face complicated state-by-state regulation and competition from established local interests.
"It's something that we're really focusing on, but similarly we don't desire to overhype it," said James Midmer, spokesman at Paddy Power Betfair, which recently bought the US fantasy sports site FanDuel.
'Require time'
The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming profits 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 decision, which overruled a 1992 federal law that disallowed states outside of Nevada and a few others from authorising sports wagering.
The judgment discovered the law was an over-reach of federal power. But the court it did not in fact legalise sports wagering, leaving that concern to regional lawmakers.
That is expected to lead to significant variation in how firms get certified, where sports wagering can happen, and which occasions are open to speculation - with huge ramifications for the size of the marketplace.
Potential profits varieties from $4.2 bn to practically $20bn yearly depending upon elements like the number of states transfer to legalise, Oxford Economics estimated in a 2017 study for the American Gaming Association.
"There was a lot of 'this is going to be substantial'", said Will Hawkley, London-based head of leisure for experts KPMG.
Now, he said: "I think the majority of 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 require time'."
'Remains to be seen"
Chris Grove, managing director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports wagering in some form by 2023, developing a market with about $6bn in annual profits.
But bookmakers face a far different landscape in America than they perform in the UK, where betting shops are a regular sight.
bet9ja.com
US laws restricted gaming mostly to Native American lands and Nevada's Las Vegas strip until reasonably recently.
In the popular creativity, sports wagering has long been connected to a 1919 baseball World Series match-fixing scandal.
States have also been slow to legalise lots of kinds of online betting, despite a 2011 Justice Department opinion that appeared to eliminate obstacles.
While sports betting is normally viewed in its own category, "it clearly remains to be seen whether it gets the kind of momentum individuals believe it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports wagering regulation.
David Carruthers is the former president of BetonSports, who was arrested in the US in 2006 for running an offshore online sportsbook and served prison time.
Now a consultant, he says UK firms must approach the marketplace carefully, picking partners with caution and preventing missteps that might lead to regulator backlash.
"This is an opportunity for the American sports gambler ... I'm not sure whether it is an opportunity for business," he says. "It really depends on the result of [state] legislation and how the service operators pursue the opportunity."
'It will be partnerships'
As legalisation starts, sports betting firms are lobbying to ward off high tax rates, as well as demands by US sports leagues, which desire to gather a portion of income as an "integrity fee".
International business face the added difficulty of an effective existing gaming market, with casino operators, state-run lotteries and Native American people that are seeking to protect their turf.
Analysts state UK companies will need to strike partnerships, providing their competence and innovation in order to make inroads.
They point to SBTech's recent announcement that it is supplying innovation for Kentucky Derby operator Churchill Downs as an example of the sort of deals most likely to materialise.
"It will be a win-win for everyone, but it will be partnerships and it will be driven by innovation," Mr Hawkley said.
'It will simply depend'
Joe Asher, president at William Hill US, is clear-eyed about the realities.
The business has been investing in the US market given that 2011, when it acquired 3 US companies to establish a presence in Nevada.
William Hill now uses about 450 individuals in the US and has announced partnerships with casinos in Iowa and New Jersey.
It works as threat supervisor for the Delaware Lottery and has invested millions together with a regional developer in a New Jersey horse racing track.
Mr Asher stated William Hill has become a household name in Nevada however that's not necessarily the goal all over.
bet9ja.com
"We definitely plan to have a very considerable brand existence in New Jersey," he stated. "In other states, it will simply depend upon regulation and potentially who our regional partner is."
"The US is going to be the biggest sports wagering market on the planet," he added. "Obviously that's not going to occur on day one."
bet9ja.com
