Regulated sports betting in the US: how can you get ready for it?
24 April 2018
In 2008, I was working for a mobile gaming company which had just been acquired by IGT. In the first meeting with my new division head, he said that we needed to make our platform “US ready” for when the US betting market opens up. Ten years on, we’re still waiting for this to happen. However, at the moment, something feels different and people are excited about the prospect of sports betting becoming regulated and the huge opportunities this may bring.
For those of you who don’t know, sports betting is prohibited across the majority of the states under the Professional and Amateur Sports Protection Act of 1992 (PASPA), however, New Jersey is challenging this and is leading the plea to repeal this act in favour of legalising it. If NJ win their appeal and are able to regulate sports betting, this could lead to lots of other states following suit, and then we’re not a big leap away from a regulated iGaming across most of the US.
The race for launching sports betting products
The online gaming industry is still relatively new in the US and many emerging operators will face certain challenges ahead of launching their products. There will definitely be a race to push products out as soon possible as sports betting is legalised, however, operators should also consider their quality and consistent user experience to future-proof themselves and stand out from the competition.
Picking the right suppliers and the right products will be one of the main challenges for new operators. Those that aren’t able to create their own technology from the ground up will need to rely on white label products from third-party suppliers for anything from backend platforms and frontend systems to services, such as customer management, payments, data feeds, CRM and more. Finding the best partners for this new venture will be key.
Sports betting will be regulated on a state-by-state basis, much like online gaming. For this, operators would need to adhere to the regulations of each state that would permit this. They’d need an operating licence in each state too. However, this might follow the same rule as online gaming, which means that bookmakers would need to partner with a local land-based casino to be able to run their services. It can be a very expensive undertaking, as there would be operating fees to the gambling licence holder, taxes, as well as any other setup costs assigned by the regulators. This would apply for each state, so economies of scale might not be an option in this instance, compared to Europe.
As sports betting becomes legalised and new markets open up, the rush to get a product out and be live for day one will mean that operators might take the path of opting for off-the-shelf solutions available to them at the time. If that market ends up with multiple regulated verticals (e.g. sportsbook, casino and poker), these products could come from different suppliers. This could lead to significant inconsistencies in the user experience on the frontend, as well as the backend, and the two systems might clash with each other.
This happened in online gambling in Europe back in the early days and took a long time to fix. Customers faced issues, such as disjointed UX and UI, having to register twice, depositing into different wallets, moving money around to be able to play and more.
This is something new operators need to consider ahead of going live and take into account how their customers would need to interact, considering they could be very new to online gambling or sports betting. For example, launching products that copy European sportsbooks and casinos wouldn’t be a good practice as customers aren’t familiar with them and the industry will need to mature to catch up with the gaming industry in Europe. Mainly, the products need to be intuitive and meet the needs of the target audience in mind.
Future-proofing gaming products
Currently, operators need to be looking at unifying their player management systems (PAM) to provide single logins, accounts and bonusing across all products as it’s very important for how the system would operate overall. However, even with the right PAM, their sportsbook and casino products could still look disjointed, having come from two separate parties. In this case, operators would need to make sure their frontend provides the customer with a consistent user experience.
It’s likely that some may need to use a white label product at the start to be able to offer their services as soon as possible. But it’s important to start investing in developing a robust and unified product at the same time to move the entire service to in the future, as well as being able to scale. Creating their own platform and product with custom features and services is something every operator needs to look into to stand out and have a USP.
Operators need to be thinking about strategy and how to build the frontend regardless of the different systems in the backend, as well as how their technology can meet the regulations of the states they want to operate in. Some processes may differ from state to state, such as having to provide proof of identity online or taking it to the nearest casino branch. Despite this, it’s possible to create a seamless interface that would work for customers across all states regardless of the regulatory requirements. They would have the same user journey up to the point where the customer needs to either complete the registration online or is advised to do so at a local casino.
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