Keep it simple, stupid: What history teaches us about the US egaming market

It feels like we have been having the same conversation for years, ICE after ICE. Depending upon who you ask it’s the multi billion-dollar (maybe even trillion?!) question; when will sports betting be legalized in the US?? This is absolutely not a piece on why or when it should happen, because quite frankly I am biased on the former and not qualified on the latter, but I can tell you about how to execute when it does happen.

If you have made the mistake of thinking that the hype has only just become real in the US, remember that it was in 2011 that New Jersey passed Raymond Lesniak’s bill that allowed NJ residents over the age of 21 to gamble online. 2 years later in November 2013 the first sites went live. The lead up to this was manic. If you wanted in on the gold rush, you had to have a “special relationship” with a land-based casino in the state, and so the erstwhile spring-break student-cladded tables of Atlantic City became home to the (mainly) European online gaming elite. The head honchos at Borgata, Caesars, Golden Nugget, Resorts and Tropicana suddenly found themselves being wooed by Europe’s hottest digital operators and before we knew it, shotgun marriages had been announced with Party Poker, 888, Betfair, Poker Stars and Gamesys respectively.

At the time I was in touch with all of the above and their digital spouses. My then employer, Initial Rewards, had inadvertently carved a niche that capitalized on a nuance of the NJ market; most digital devices being used to access these sites (e.g. desktops and laptops) had no GPS devices, making it impossible to prove that the user was within the NJ state lines and therefore making it illegal to allow them to gamble. Enters Initial Rewards with a dongle that plugs in to said device and triangulates the users location. Bingo. As is too often the way, this insight came to light only after sites were up and running and ready to roll; it was a classic case of “build it and they will come” without knowing if they could even use it when they arrived.

The dongles solved the location problems, but once customers were online, real problems followed. The sites were simply too complicated. Digital operators had taken sites built for their European customers, who had been online for years, and skinned them with minimal changes for the good folk of New Jersey, who hadn’t been gambling online for nearly a decade, if at all. It was with inescapable irony that the less sophisticated sites that had clearly rushed the getting-online process, namely Virgin, started to punch way above their weight. This again was a clear indication that the US market was simply not ready for the same products being used by a mature European market.

One thing that we do have in common with out transatlantic neighbours is a zest for all things mobile. Mobile usage for fantasy sports (in the absence of any verified sports betting data) has risen to 39% from 25% in 2012. Now this might seem slightly behind best estimates of the UK market, but the pool is bigger and the growth is comparable. What will absolutely not work for the US market is the interface adopted almost without exception in the UK, which is best understood as a spreadsheet built for desktop, squeeze onto a mobile interface.  With 67% of all in-app purchases coming from North America, we know that this is a market accustomed to a native experience that is still not quite possible to match on mobile web, although great strides are being made to bridge the gap.

Today, we are, if the hype is real, moments away from a repeal of PASPA. To think that a return to the pre-UIGEA days is on the horizon is naïve; regulation will make for a tough environment. Opportunity does of course knock and when the doors do open, learn from the past. Understand your audience and keep it simple.

Adam Wilson, co-founder of swipe-to-bet app Bookee