Sports Betting Lite – an opportunity to fill in the US gambling sector

Sports Betting Lite – an opportunity to fill in the US gambling sector

Ewa Bakun, Clarion Gaming’s Head of Content, discusses possible interim strategies for the US gaming sector to get ready for legal sports betting in the country

Three to five years is the usual estimate of the time left until PASPA gets repealed in the US, paving the way for legal sports betting, most likely authorised on the state level. But those of us who have seen a painstakingly slow progress of iGaming know that this process could take way longer – especially when we start looking at the detail of regulation.  As we know, these details often spearhead industry divisions, as it has happened in the case of iGaming.

Regardless of the continued – however softening – opposition of the leagues to legalised sports betting, experts agree that the question is not ‘if’, but ‘when’ this is likely to happen. The pressure is mounting on the leagues to defend their concerns around sports integrity, which in 1992 gave origin to the sports betting ban in a form of federal law called PASPA (Professional Amateur Sports Protection Act) – the concerns that every day seem more and more inconsistent and hypocritical, and are being called out as such by mainstream media. Sports integrity technology that monitors suspicious betting activities has been proven effective over the years in regulated markets, where match-fixing is way easier to spot, precisely because of regulation.

The days of sports betting ban seem to be counted. For the operators aspiring to take advantage of legal sports betting, just like Nevada operators have been doing for years, it’s difficult to ignore the buzz around this topic, fuelled by the press headlines, growing support of the public for legalisation, news on the legal challenges to PASPA by states such as NJ and bills in various states that lay the groundwork for regulation as soon as PASPA gets repealed.

Casinos in the US, outside of Nevada, have no experience of operating sportsbook. Yet, they are the likely beneficiaries of legalization as future operators. What can they do to start preparing? And is this the right time to start preparing? It could be three, or five, or even 10 years before they can enter that market – isn’t it premature to start investing, beyond spending time monitoring the evolution of the debate through industry and mainstream press?

It looks like some US casinos and even international sportsbooks consider 2017 to be the right time to make a move into the future of legal sports betting market in the US. Resorts Atlantic City is expected to launch a variation of fantasy that’s way closer to house betting with a NJ start-up SportAD, Paddy Power Betfair spent $19m to acquire a fantasy sports company Draft, despite the market being totally dominated by FanDuel and DraftKings, operators such as Penn National and Rush Street have been the first ones in the country to implement virtual sports and other start-ups, such as Iconic FaceOff, explore other innovative models, like prediction markets and peer to peer betting, to offer some sort of real money sports game that’s legally viable right now.

Instead of taking a wait and see approach, these progressive operators are grabbing the opportunity now to start establishing a footprint with the sports fanatic US consumer base to create brand awareness, build database and gain expertise. But this isn’t just an investment in the future which will only pay off when sports betting becomes legal. On the contrary, this is an opportunity to tap into new and younger audiences, the coveted Millennials, to bring them into the casino property, incite them to spend on the variety of amenities, and convert some of them to the casino floor, being often redeveloped to attract new costumer demographics anyway.

Could this ‘lite’ version of sports betting follow in the footsteps of social casino, in its early days considered just an interim strategy before iGaming becomes available, but then proven to stand on its own as a profitable product?

Time will tell, but clearly there is a huge opportunity here for innovation in that space. And as organizers of the GiGse Start-Up LaunchPad, a competition in which five start-ups, selected in a submission process, pitch their ideas to a group of gaming executives, we have seen that start-ups are starting to notice.

The last edition of the GiGse LaunchPad, which took place in San Diego in April 2017, saw a growing number of submissions from a variety of sports companies that are trying to push the boundaries of the rigid rules around sports gaming in the US. With the momentum building up around the legalization of sports, we are likely to see more of those. The key for them will be to prove that they can be profitable for casinos even if legal sports betting takes longer to become a reality, whether as a conversion tool for their B&M operation, or as a product on its own.

Sports betting lite, as well as other topics around legal sports betting in the US, including path to the repeal of PASPA, changing sports leagues’ attitudes towards sports betting, sports integrity, data monetisation and new revenue streams for the sport rights holders, and routes to market, will be discussed during the Sports Betting USA conference, to take place in New York City on November 14-15. More information and registration available on: http://www.sportsbettingusaconference.com/

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