US Opinion: Ready to Launch?
Orchid Sports chairman David Briggs says the time has come for the industry to roll-up its sleeves to make the most of existing US gaming legislation.
Attending the recent G2E conference in Vegas, it was clear the debate on egaming’s eventual roll-out in the US has firmly evolved from the “if” to the “how”.
Will it be Federal? Will it be Intrastate? Will it be public (i.e. in the hands of the Lotteries) or private? If private, how will the Native American tribes’ interests be considered? Is there space for new entrants? What about the “old” dot.com operators?
As for the “when”, that unfortunately seems a subordinate question to the “how” as the various industry factions fight to secure a fair share of the regulated egaming pie.
Speaking at the conference about my experiences working with Intralot Interactive and the DC Lottery, my position on these questions was clear. UIGEA allows for intrastate egaming, as long as that state or jurisdiction has laws in place to enable it. Betting and gaming policy in the US has always been under the sovereignty of each state “ so this policy can hardly be considered radical.
I can hardly blame the various interests who stand to gain from a federal licence for egaming. It would represent a tremendous money-making proposition and be far more cost effective than setting up a state-by-state operation. Who in their right mind would choose to re-create the expensive, complex and inefficient European regulatory patchwork quilt? The days of setting up in one (tax-free) jurisdiction and taking business from all over the world on one set of servers and under one licensing regime are unfortunately a thing of the past for nearly all of the industry’s public companies.
The time has come to stop reaching for the skies and, as an industry, roll-up our sleeves to make the most of existing legislation in order to make a start on developing a regulated US egaming market.
US hostility
As a long-term private sector operator I understand the hostility from certain people in the US, such as in Washington DC, where the lottery will have an effective monopoly on online gambling. After all, what is in it for them? The answer is that, as the first launch in the US, it will finally get the process moving and allow the market to grow.
Just as in Europe, different states will approach things in different ways. This will depend on public interest in each state, as well as the vested interests in each area. I’m sure some parts of the US will have a ferociously competitive market, others will be prohibited, while in others the lottery will again be the exclusive provider of egaming products.
The US online gaming market is big enough to support a substantial industry with the flexibility of the likes of bwin.party, that is prepared to turn itself into a b2b operator as and when is necessary, the right one. It can trim its sail according to the prevailing regulatory and competitive wind in each state. Perhaps it will operate under its own brand in California, but as white-label supplier in New Jersey.
This patchwork model is not just European; it is a model that is being adopted around the world. In Canada, lotteries are already collaborating to share poker liquidity across provinces and over time the US could (and should) aim to do the same; regardless of whether they are lotteries or private operators.
The ‘when’
As for the “when” of launching regulated egaming in the US, my experiences there tell me that the operational challenge will be a significant one. Most of the tools at the disposal of an egaming operation in Europe are at a very early stage. The regulated payments industry for online gaming here simply does not exist. Geo Location systems that exist today have not been designed for secure verification for PC users on a state-by-state basis and, to be considered reliable, require a new generation of technologies.
There are no state-by-state existing pools of local egaming customer service agents, egaming operational and marketing staff, or the fraud and finance experts needed to make sure that interactive games remain safe for players and operators. The need for qualified trainers and training cannot be under-estimated.
Yet to take on these challenges is to know that finally, the wheel appears to be turning and egaming is coming to the US. It may not be the perfect federal system that many desire and have fought so long for, and maybe the first operators will not have the illustrious pedigree in gaming that others can boast, however it remains a step forward for the industry from which many (public, private and even the player) can one day benefit.