UK sports betting firms bet on US after sports betting wager judgment


5 June 2018


By Natalie Sherman


Business press reporter, New york city


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


From Tuesday, brand-new rules on wagering came into result in Delaware, a tiny 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 allow sports betting.


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


For UK firms, which are facing debt consolidation, increased online competitors and tougher guidelines from UK regulators, the timing is especially appropriate.


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But the market says counting on the US remains a risky bet, as UK business deal with complicated state-by-state policy and competition from entrenched local interests.


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


'Require time'


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


Firms are wishing to take advantage of 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 wagering.


The judgment discovered the law was an over-reach of federal power. But the court it did not actually legalise sports betting, leaving that concern to regional legislators.


That is anticipated to cause significant variation in how firms get accredited, where sports betting can occur, and which events are open to speculation - with big ramifications for the size of the market.


Potential profits varieties from $4.2 bn to nearly $20bn annually depending upon aspects like the number of states relocate to legalise, Oxford Economics approximated in a 2017 study for the American Gaming Association.


"There was a lot of 'this is going to be big'", said Will Hawkley, London-based head of leisure for consultants KPMG.


Now, he said: "I believe the majority of 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, managing director at Eilers & Krejcik Gaming, predicts that 32 states will legalise sports betting wagering in some form by 2023, producing a market with about $6bn in annual revenue.


But bookmakers face a far different landscape in America than they perform in the UK, where wagering stores are a frequent sight.


US laws limited gaming mainly to Native American lands and Nevada's Las Vegas strip up until reasonably recently.


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


States have also been slow to legalise many forms of online betting, regardless of a 2011 Justice Department opinion that appeared to remove challenges.


While sports betting is typically seen in its own category, "it clearly remains to be seen whether it gets the type of momentum people think it will," said Keith Miller, law professor at Drake University and co-author of a book about sports betting regulation.


David Carruthers is the previous 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 states UK firms should approach the marketplace thoroughly, selecting partners with care 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 company," he says. "It truly depends on the outcome of [state] legislation and how the organization operators pursue the chance."


'It will be partnerships'


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


International companies face the included difficulty of a powerful existing video gaming industry, with casino operators, state-run lotteries and Native American tribes that are looking for to defend their turf.


Analysts state UK companies will require to strike partnerships, using their expertise and innovation in order to make inroads.


They point to SBTech's recent announcement that it is supplying technology for Kentucky Derby operator Churchill Downs as an example of the sort of offers most likely to materialise.


"It will be a win-win for everyone, however it will be partnerships and it will be driven by innovation," Mr Hawkley stated.


'It will just depend'


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


The company has actually been purchasing the US market since 2011, when it bought three US firms 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 danger manager for the Delaware Lottery and has actually invested millions together with a regional developer in a New Jersey horse racing track.


Mr Asher stated William Hill has ended up being a household name in Nevada but that's not always the goal all over.


"We definitely intend to have an extremely substantial brand name existence in New Jersey," he stated. "In other states, it will just depend on policy and potentially who our regional partner is."


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


More on this story


US ruling opens way for sports betting


14 May 2018


Paddy Power purchases fantasy sports betting website


23 May 2018