Adam is TruNarrative’s Head of Gaming and a 10 year veteran of Identity and Financial Crime Management in the Gaming industry.
This blog outlines his thoughts on the key factors for operators to consider when setting up Sports Betting in the US.
Betting on America? My thoughts on the Sports Betting landscape
Since the overturning of The Professional and Amateur Sports Protection Act (PASPA), now over a year ago, we are starting to see the state-by-state enaction of Laws to regulate the emerging industry.
With nearly 10 states live and around 7 on the back burner, there is scope and incentive for European operators to open their books to the US.
So, where is the best place for operators crossing the Atlantic to set up shop?
Too much competition?
Based on saturation and financial obligation, Nevada, is a clear State to avoid for all but the largest operators. There are a lot of very big fish in a large but crowded pond – for the time being that is.
Pennsylvania has set the cost of entry very high, with 36% taxation and a licensing fee of $10 million.
For the mid-size operators that have found their niche in Europe it’s best to leave the gambling meccas of the US alone.
Not to say there isn’t scope for smaller operators to make their mark, it will be interesting to see how they go about this and where.
Could the Midwest be the Best?
Indiana, Iowa, and Illinois all have legislation passed / tabled but choosing a Midwest market is definitely a question of swings and roundabouts.
With Illinois stalled by the gaming board, tax rates of 15% and a $10 million dollar fee cap, alongside talk of a requirement for in-person registration before any mobile bets are placed, it looks set to lose out to its neighbours – at least in the short term.
Indiana at 9.5% tax and proposed $10,000 set up then $5,000 per year licence fee.
Iowa’s 6.75% tax and $45,000 per license fee with $10,000 yearly renewals.
Indiana and Iowa have licensing fees lower than some European jurisdictions but the red tape involved may offset this.
With attitudes to mobile casino games being very different to Europe, mobile sports betting will be the largest stream of revenue for the foreseeable future.
We’re seeing states like Tennessee exclusively legalise mobile sports betting along with a 20% state tax.
Nearly every bill being introduced mentions mobile, which is more than can be said for some European legislation.
So, what’s to be expected for those of us “Coming to America” …
The US is just starting to normalise the idea of sports betting.
The lack of federal regulation, although liberating, can prove to be challenging as there are 50 jurisdictions to appease and many opinionated residents to persuade.
When seeking a new territory, particularly in the states, the main objectives should be; Taxation under 10%, mobile wagering and of course in-play betting – as we all know that’s a whole new topic especially regarding collegiate athletics ….
For those operators who are planning a multi-state strategy, the differences in regulation mean flexibility is a major factor in their choice of service providers. The TruNarrative platform is perfectly placed to manage a multi-jurisdiction customer onboarding strategy…
Adam is attending Betting on Sports 17th -20th September in London.
Please get in touch to arrange a meeting at the event to discuss the above or other gaming-related risk and compliance questions.