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 latest thoughts on Sports Betting in the US.
Disruption’s the name of the game in American sports betting.
Ever since the Supreme Court modified the law, the industry has changed dramatically. There’s now a new kid on the block – sports publishers are entering the fray on mass.
Surely most lack the expertise commanded by such a heavily regulated sector?
Readers have grown up with fantasy teams and other community gaming, so this is a natural progression as it enables publishers to:
- Commercialise a passionate, loyal audience that loves your brand
- Diversify, amidst unseen levels of uncertainty in the sector
- Monetise the tribalism and competitive nature of most sports fans
The offerings vary in scope too – from apps affiliated with household names (Fox Sports) or new-kids-on-the-block like theScore, to more independent brands where the publishing arm operates as one entity and the betting operation taps into that editorial space.
The dollars speak for themselves. Take the state of New Jersey as an example – since the beginning of 2019, $1.8billion has been wagered online on sports alone. That’s not a statistic plucked from obscurity, rather the official figure released by the state’s Division of Gaming Enforcement.
Even more compelling was May 2019’s monthly activity – more money was bet on sports in New Jersey than in Nevada, the stalwart of American gambling.
Grab the gold-plated shovel
Whichever way you look at the market, a gold rush is afoot – a dual fronted land-grab where publishers are converting existing readers into betting customers alongside a targeted drive to win over competitor audiences.
There are also some parallels with the UK too.
As online betting exploded in popularity in recent years, British broadcasters have also tentatively moved into the market. The most successful outfit to date is probably Sky Betting & Gaming, although UK authorities do have an unwavering desire to maintain the strong lines that exist between the two separate industries. For now, at least.
Amongst all this transformation, though, there does appear to be an elephant bet in the room.
Have publishers been too hasty?
Have they opened a massive can of compliance-flavoured worms?
Sports betting is a completely different industry to editorial, and it’s one that’s strictly regulated and still in its infancy in the US. The sector’s regulations are fragile and the practicalities of running an online sports betting company are complex.
Publishers need to think like a technology company and companies need the right systems to meet customers’ expectations of a unified, seamless user experience while also ensuring compliance.
Move too quick, and these companies could well face a massive headache having to reverse engineer the technologies needed to adhere to regulations. There’s also the need for online operators to partner with an offline gambling provider as well as state-by-state licence applications. More complexity, essentially.
Seamless AML (Anti-Money Laundering) and KYC (Know Your Customer) capabilities are a must, especially as the user information that most publishers have of their reader base is patchy at best. These cannot be overlooked and need to be smoothly integrated with other elements of the financial compliance chain.
The future is online
As we’ve mentioned before, pent up demand in a market hungry for sports betting has been unleashed, which when combined with extensive mobile usage and stuttering advertising income, creates the perfect conditions for change.
Navigating these risks confidently and compliantly will be crucial for any sports publisher entering the market with a bold vision.
They just need to ensure they have the expertise, technology and knowledge to make it a bet they can win.
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.