26 September, 2022

Uniting a fragmented market

Liv Biesemans, Group Deputy General Counsel at Kindred Group, discusses Kindred's development in the US via its flagship Unibet brand.

What are some of the broader regulatory differences Kindred has experienced in the US market compared to Europe? Do you find yourself with more flexibility in terms of the odds you can offer and how you are able to market those odds?

Europe and the US are both very fragmented markets. In the US, you’re also dealing with a state-by-state (similar to the EU country-by-country) regime but with a more complex regulatory framework of state, tribal and federal legislation. Our experience in dealing with that regulatory fragmentation and being able to achieve scalability despite this has definitely helped our expansion in the US. What we’ve noticed in the US is that sports and advertising are a much more integral part of life, and the tolerance towards (the volume of) marketing of US customers is perhaps higher than in Europe. The budgets are also exponentially greater. That doesn’t mean we shouldn’t learn from the developments in Europe, where marketing restrictions and bonus bans are now more common than not in the main markets (UK, Sweden, Belgium, Netherlands, etc.) after years of over-advertising. As an industry, we definitely have a responsibility in mitigating this risk proactively in the US.

When it comes to the variety of odds and markets, there are two interesting distinctions. Firstly, when it comes to the top sports, we see a much wider offering in the US, as a result of years of fantasy games – the customers’ appetite for player props is definitely higher than in Europe and the market has done very well to meet that demand. At the opposite end, we see more restrictions in terms of non-sports markets (like Oscars, politics etc.) which is understandable for a younger market – but this is likely to relax as regulators grow confidence that the industry can manage the risks.

Each state has different regulations. Is there a fine line between what you can  do in one state compared to another?

The US is a fragmented market and gambling regulations are managed on a state level. In practice, it means that whenever we plan to enter a new state, we have to approach that state as a standalone project that requires a local licence: a dedicated analysis of the regulatory framework in place, a customisation of your platform and website setup, a separate platform certification, additional supplier integrations etc. We also operate both retail and online sports betting operations in Pennsylvania and Arizona, which is a different operational setup entirely. The biggest difference between the states is the product scope: most states cater for sports betting (although there are local restrictions and differences) but only a number of states allow for iGaming. Payment methods are another area where we notice differences between some states. However, we also see a great deal of commonalities between the different states in terms of know your customer (KYC), responsible gaming, advertising, etc, so we can definitely build on a shared baseline across the different states.

How does branding differ in the States? Do you diversify your branding for each state and how does it differ from how you brand your sportsbook in Europe?

Our brand positioning is the same across all states, but there will be different targeted nuances in the different states/provinces driven by customer preferences, partnerships (i.e., NJ Devils, Philadelphia Eagles or Pittsburgh Steelers) or product scope (i.e., sports betting vs iGaming).

What are some of the challenges you’ve faced tapping into local US culture? Sports betting is culturally entrenched in some European markets. How have you had to promote sports betting and the brand, and how does your promotion of sports betting in the US differ from Europe?

While sports betting may be more culturally entrenched in some European markets (definitely not all), the perception towards the industry is much more negative which has resulted in extremely adverse policy decisions. We don’t see that negative perception as widespread in the US at this point. On the contrary, most recent consumer surveys actually demonstrate a more neutral to positive perception towards sports betting. The societal role of sports, and the importance of the leagues and teams definitely plays a huge factor in that.

How do you envisage your operations in the US developing over the coming years? Can you see sports betting regulations tighten (to something similar to Europe) or will they remain as they are now?

We’re hopeful that iGaming will become more widely regulated, on the back of the success in New Jersey, Pennsylvania and Michigan. We’re also looking forward to the regulation of sports betting in a number of key states, including California and Texas. It’s difficult to predict whether we’ll see a similar trend as in Europe (or the pace of it) but we hope that as an industry we can continue to work together to create a sustainable sector. And one that keeps the protection and safety of the customer at heart.