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IN-DEPTH 13 August 2018
Getting a handle on sports betting
Understanding the opportunities offered by sports betting legalisation in the US is a challenge for all operators to wrestle with. Deputy President at Sportradar US, Dr Laila Mintas, offers her insights into how educating US operators might light the way for this process
By Gambling Insider

Now the hard work begins. The decision delivered in mid-May by the Supreme Court of the United States (SCOTUS) in the case between New Jersey and the National Collegiate Athletic Association (NCAA) has set the scene on what may well be one of the most exciting periods in the history of the global gaming sector.

As much as we have had months, indeed years to prepare for the eventual decision, it is only now that we will find out to what degree the industry is prepared for what comes next. Experience from elsewhere, when countries have opened up specifically to online gambling, shows that each new market comes with its own challenges and nuances.

The various and widely divergent number of states in the US will be no different.

This is a new frontier for the gaming industry to get to grips with.

At least with New Jersey there is a wellspring of recent experience in how to establish and grow a new gaming market. Since the state opened up to online gambling in November 2013, both domestic and foreign operators and suppliers have learned the lessons of how any individual market develops.

Since market opening the online market has grown substantially year-on-year and this has encouraged operators both within and outside the state to believe that sports betting can also be a winner in the Garden State.

But all this came after something of a slow start for online (particularly poker) and the first lesson to be learned from New Jersey, and elsewhere, is that the industry will need to be patient.

The PASPA repeal news was understandably followed by a flood of statements and news from the industry and various figures were being talked about for the potential size of the US sports betting market.

According to the various estimates, within the space of four or five years it could be a market worth $6bn, $7.5bn or up to $10bn depending on the view taken over which states might open up. But the variables here are multiple. Before we get to revenue potential, we have to more fully understand which states, under which regulations, with which fees and taxes and in what form.


All of these factors individually will have an immense impact on the success of any given market. Crucially, both operators and suppliers need to understand the complexity of the US gaming scene.

It should be remembered that the central argument in the Supreme Court opinion was to assert individual state rights. That points to one very important aspect of how sports betting will be adopted.

As with all other forms of gambling in the US, the spread of sports betting will be state-by-state. To make a highly pertinent point, it has to be noted that the Wire Act is still in place, in effect banning interstate gambling. In order to understand the US opportunity, all involved have to look at each state individually and seek how to optimise the intrastate opportunity.

The online gambling industry is well aware of how the regulated European market has thrown up a patchwork quilt of regulations and market realities. This will also be the case in the US. Each gaming state across the country is different and importantly has an array of differing stakeholders that will all need to be involved in the process, from tribes to casino interests and the politicians.

And most obviously, the major US sports bodies and leagues now have to be persuaded about the benefits of licensed and regulated sports betting. Sportradar has extensive experience of talking to sports bodies it is a significant element of our business and we like to feel it gives us a decent insight. We know their concerns aren’t just monetary ones.

It will be for others to decide such matters as integrity fees and other aspects of the relationships between the sports and the regulated regime in any given state. The American Gaming Association (AGA) will have a big role to play as well as others.

We are encouraged that the AGA was quick to release a statement in the wake of the decision, suggesting it was “ready to work with all stakeholders: states, tribes, sports leagues, and law enforcement to create a new regulatory environment that capitalises on this opportunity to engage fans and boost local economies.”

Experience tells us that issues and arguments are best resolved through discussion and cooperation and the AGA is taking the industry down the right route here. Sportradar has a long track record regard to both sports integrity and the interaction between sports and betting.

We have been speaking to all the stakeholders for a while now, getting to understand their attitudes and what they believe their own regulated markets should look like. We have also been able to explain to them what we think we can offer and how we can help further the cause of regulated markets.

The arguments in favour of regulating sports betting and bringing activities into the regulated space are, we believe, unarguable but we are also aware that the art of persuasion necessarily means they need to be stated again and again.

Regulated sports betting brings with it procedures and systems designed to spot anomalies. Integrity and the highest standards of compliance can be built into the system. We can think of no better reassurance for US stakeholders than that we as a company work with the global football authorities on alert systems that are designed to ensure that match-fixing is identified and rooted out.

Again, the argument needs to be foregrounded that no one other than bad actors benefit from sports betting that is pushed underground, least of all the regulated operators and suppliers.

Far from opening up sport to further dangers, the licensing and regulation of sports betting acts, we suggest, as a deterrent.

Quite simply, shady activity cannot survive in the spotlight.

We have a track record as a business of dealing with all the stakeholders involved in sports betting from across the spectrum including operators, sports bodies and enforcement authorities. The answer to fears regarding integrity are to explain and educate about how sports betting works elsewhere in the world.


What this decision does is for the first time truly globalise the world in sports-betting terms. There are multiple examples for how sports betting can work in regulated markets and equally various models. What success will look like in any given state will very much depend on what each of the stakeholders want. Yet the lessons from other markets are that there are models enough to accommodate the demands from each individual state.

Regardless of the model, we think the likelihood is that regulated sports betting works as a catalyst to growth for all stakeholders. Most clearly, and the examples from Europe are clear, regulated gaming brings in tax revenues. As is indicated by the scale that is being talked about in terms of market size, hopes are high that sports betting can generate much needed revenue for the states in question.

Again, it is up to others to discuss rates and other details but the examples for elsewhere suggest a sensible approach can optimise the opportunity and bring the greatest reward for all involved. Policymakers are entering new territory here and again, it is the suppliers and operators from across the globe who can help advise and guide here.

The example from Europe is informative. If the potential regulators and legislators are willing to hear arguments over integrity then we can hope that similarly they will be open to looking for examples from elsewhere about how markets can best be regulated in order for them to meet their policy objectives.

The passing of legislation is a complex process and one that we as a company are very familiar with from our experience in many markets around the world. That experience will be invaluable in the years ahead as we seek to impart our knowledge to any stakeholder that is willing to listen.

In the opinion of the Supreme Court, Justice Alito makes mention in his summary of the historically controversial nature of the debate around sports betting in the US. He points out that arguments rage between supporters, who “argue that legalisation will produce revenue for the States and critically weaken illegal sports betting operations, and opponents who contend that “legalising sports gambling will hook the young on gambling, encourage people of modest means to squander their savings and earnings, and corrupt professional and college sports.”

But as he points out, the legalisation of sports betting requires an “important policy choice”, one that each state must decide for itself.

This is where we believe the industry must step up. The case in favour of sports betting must be made in every single state where the issue is being discussed.

Because of the success the industry has enjoyed in Europe in opening up various sports betting markets, it is possible that some think that the arguments in favour of legislation and regulation are self-evident.

This is not the case, particularly in the US. The individual states have been granted the opportunity by the Supreme Court to do what they want when it comes to sports betting, a move that is extremely welcome from the gaming industry’s point of view. Now the chance comes to shape the new landscape.
IN-DEPTH 16 August 2019
Roundtable: David vs Goliath – Can startups really disrupt the industry?

(AL) Alexander Levchenko – CEO, Evoplay Entertainment

Alexander Levchenko is CEO of innovative game development studio Evoplay Entertainment. He has overseen the rapid expansion of the company since it was founded in early 2017 with the vision of revolutionising the player experience.

(RL) Ruben Loeches – CMO, R Franco

Rubén Loeches is CMO at R. Franco Group, Spain’s most established multinational gaming supplier and solutions provider. With over 10 years working in the gambling, betting and online gaming industries, he is skilled in operations management and marketing strategy.

(JB) Julian Buhagiar – Co-Founder, RB Capital:

Julian Buhagiar is an investor, CEO & board director to multiple ventures in gaming, fintech & media markets. He has lead investments, M & As and exits to date in excess of $370m.

(DM) Dominic Mansour – CEO, Bragg Gaming Group:

Dominic Mansour has an extensive background of nearly 20 years in the gaming and lottery industry. He has a deep understanding of the lottery secto,r having been CEO at the UK-based Health Lottery, as well as building from scratch, which he sold to NetPlay TV plc.

What does it take for a startup to make waves in gaming?

DM: On the one hand, it’s a bit like brand marketing; you build an identity, a reputation and a strategy. When you know what you stand for, you then do your best to get heard. That doesn’t necessarily require a TV commercial but ensuring whatever you do stands out from the crowd. Then you have to get out there and talk to people about it. 

AL: Being better than the competition is no longer enough; if you’re small, new and want to make a difference – you have to turn the industry on its head. Those looking to make waves need to come up with a new concept or a ground-breaking solution. Take Elon Musk, he didn’t found Tesla to improve the existing electric cars on the market, he founded it to create the industry’s first mass-market electric sports car. It’s the same for online gaming; if you want to make waves as a startup, you have to bring something revolutionary to the table.

JB: Unique IP is key, particularly in emerging (non-EU) markets. As does the ability to release products on time, with minimal downtime and/or turnaround time when issues inevitably occur. A good salesforce capable of rapidly striking partnerships with the right players is vital, as is not getting bogged down too early on in legal, operational and admin red tape.

How easy it for startups to bring their ideas to life? How do they attract capital?

AL: It depends on the people and ideas behind the startup. Of course – the wave of ‘unicorns’ is not what it used to be. Some time ago the hype was a lot greater in terms of investing in startups, but that’s changed now. Investors now want more detail – and even more importantly, to evaluate whether the startup has the capacity (as well as the vision) to solve the problem it set out to address. That’s not to say investors are no longer interested in startups – they certainly are – but now more than ever, it’s important for startups to understand their audience as well as dreaming big.

JB: To get to market quickly, you need a great but small, team. If slots or sportsbook, the mathematical engine and UX/UI are crucial. Having a lean, agile dev team that can rapidly turn wire framing and mathematical logic into product is essential. Paying more for the right team is sometimes necessary, especially when good resources are scarce (here’s looking at you, Malta and Gibraltar).

Building capital is a different beast altogether. You won’t be able to secure any funding until you have a working proof of concept and, even then, capital is likely to be drip fed. Be prepared to get a family and friends round early on to deliver a ‘kick-ass’ demo, then start looking at early-stage VCs that specialise in growth-stage assets.

How do you react when you see startups coming in with their plan for disruption?

RL: We welcome the innovation and fresh thinking startups bring. This is particularly the case in Latin America, with a market still in its infancy. One area we’d especially like to see startups making waves is in the slot development sector. Latin America is a young market that needs local innovation suited to its unique conditions – especially in regard to mobile gaming.

Operators eyeing the market have Europe‐focused core products, which creates a struggle to work to the requirements of players and regulators. To succeed there, it has become more important than ever to work with those with a knowhow of the local area to adapt products and games to besuitable from the off; we welcome the chance for local talent to develop and grow.

Do you think it’s easier for established companies to innovate and establish new ideas? 

AL: From a financial perspective, yes. It is without a doubt easier for incumbent companies to establish a pipeline of innovation via their R & D departments, as well as having the tools to hand for data gathering and analysis.

But it stops there. Startups hold court in every other way. Not only are they flexible, they can easily switch from one idea to another, change strategy instantly as the market demands and easily move team members around. Established companies know this – and this is why we’re seeing an emerging trend for established companies to acquire small, innovative online gaming start-ups. They have the right resources and unique ideas, as well as the ability to bring a fresh approach to businesses’ thinking.

RL: For me, it’s always going to be established companies. Only with the resources, industry experience and know‐how can a company apply technology and services that truly make a difference. Of course there are exceptions. But when it comes to providing a platform that can be approved by regulators across multiple markets – as well as suiting an operators’ multiple jurisdictions – it is simply impossible for a couple of young bright minds with a few million behind them to get this done.

DM: I actually think it’s harder for established companies. It’s key to differentiate between having a good idea and executing one. That’s where the big corporates struggle most. They’re full of amazing people with all sorts of great ideas but getting them through systems and processes is nearly impossible.

Is it essential to patent-protect innovative products?

AL: It’s a very interesting subject. If we take IT for example – patents can actually become a block to the evolutionary process within the industry. Of course, getting a patent future proofs yourself from the competition copying your concept but, having said that, if you’re looking to protect yourself from someone more creative, smarter and agile, you’ve probably lost the battle already!

In our industry everything is moving faster and research takes less time than the development itself. No matter how good you are at copy pasting, you can’t copy Google or Netflix. The most important thing is not the tech itself but rather its ‘use-case’ – or in other words, does it solve what it’s meant to solve? Competition is healthy and the key to innovation. If you spend your whole time looking behind you, you’ll never be able move forwards.

JB: Tricky question, and one that depends on what and where you launch this IP. It can be difficult to patent mathematical engines and logic, mostly because they’re re-treading prior art. Branding, artwork and UX is more important and can easily be copied, but the territories you launch will determine how protectable your IP will be once patented. US/EU/Japan is easy but expensive to protect in. But China/South East Asia is a nightmare to cover adequately. Specialised patent lawyers with experience in software, and ideally gaming, can help you better.