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NEWS 7 August 2019

Gambling.com CEO: “I’ve been blown away by the activity in the US this year”

By Nathan Joyes

Nathan Joyes sat down with Gambling.com Group CEO Charles Gillespie to discuss the progression of sports betting in the US since PASPA was overturned.

First of all, how well do you think sports betting has been welcomed in the US so far?

Sports betting isn’t coming to the US; regulated sports betting is coming to the US. That’s where it is pretty hard to argue against regulation. Why should the state not tax regulated operators when it is already happening in the US? The majority of Americans appear to be in favour of regulated sports betting. Getting these states up and running is pure politics; it’s who is getting which slice of the pie. The moral/ethical side of the debate against gambling has really been diminished as a result.

Are restrictions preventing the pace of sports betting’s expansion in the US?

Every state has its own jurisdiction, so if one wants to offer online gambling to all Americans it is going to require all 50 states to have legislation at state level, and then you get licensed in every single state. Most states start with the lottery, that’s their gateway form of gambling. From there, the states can decide to do other types of gambling, where they just give it to the lottery commission to regulate and operate.

That’s fine but it can take on many different forms. If it ends up being a state monopoly, that is a very bad outcome for everyone. A private sector has a very limited role to play – but if they have a free-market approach there are multiple licenses, reasonable taxes and the lottery commission can regulate in a sensible, open market, which would be fantastic.

There is this kind of risk the lottery commission takes a very lottery-style view on it. The lottery in many states is run by the government, and then brings in one of its lottery providers, but that’s it.

If we take a similar view with sports betting, operators will go to a supplier and there’s no public open market process to regulate the market. That can be a negative outcome for both the industry and the consumer. This is because the consumer needs good options; otherwise they aren’t going to move their action away from offshore sportsbooks onshore. They need competitive products, otherwise these states won’t succeed.

Do you feel as though consumers will stay on the black market if this remains the case?

Absolutely. People in the US are positive about regulation but the offshore market is healthy, it is mature, it works and it invests hundreds of millions of dollars in its products. These are good customer experiences. So to just assume that to open a bare bones onshore sportsbook will immediately recapture all consumers is very naïve. For me, don’t make the licensing process too hard, don’t make the taxes too high – you really want to encourage investment.

The UK, for example, has this highly dynamic and interesting system because it has been relatively easy to get a gambling license there and that is why it is the spiritual home of the gambling industry.

Are you surprised by the lack of states which have welcomed sports betting since PASPA was overturned? Did you expect to see more states legalise wagering by now?

The opposite, in fact. I’ve been blown away by the activity this year. You’ve had 39 of the 51 if you count Washington DC; jurisdictions in the US introduce legislation for sports betting. I don’t think any other legislation can compare on any other issue.

Now, of course, all 39 of those efforts did not succeed but on the latest numbers, 15 of those have passed legislation and nine are now live. The states are far more nimble than federal law, they can change or reverse decisions far easier.

Tennessee has legislated with one of the most free-market approaches in the US, which is currently mobile-only, which made the political conversation in Tennessee simple. There was no one from the land-based side of the industry clambering to get a seat at the table. So Tennessee started mobile-only, tax rates and licensing fees are a little high but workable, but the result is you are going to have one of the most competitive and interesting markets in America for sports betting.

The door in Tennessee has been blown wide open and there’s this neighbour effect we are seeing. When one state legalises, others are rethinking about their approach to sports betting. It is truly an exciting time.

What do you make of the European affiliates making headway in the US?

I think it is very interesting. What you haven’t seen from European affiliates yet is any of them building a meaningful US affiliate business on their own. So the only way into the market thus far for them, in a meaningful way, has been through acquisitions.

They are all trying, that’s for sure, not least ourselves. We’ve put a huge amount of investment into the US, where we have had people based for ten years now. I think that will change in time; there will be a lot of organic growth in US states from the big European affiliates.

Gambling.com was granted approval in New Jersey. What have been your steps in the state so far?

We have been live in New Jersey for around 18 months. We entered the market with a basic license and now we have upgraded that license to the next tier, which means we can do revenue share deals – but we’re in the market and we’re sending players to operators.

We’ve got Gambling.com in the US as well as Bookies.com, which is a US-first media property for us. Gambling.com is global, which has a very big UK business, whereas Bookies.com we feel is a better fit for the US.

This is because this next wave of regulated online gambling in the US is going to be all about sports betting – and so Bookies.com and its brand is appropriate for that.

What are your goals for the remainder of 2019 and early stages of 2020?

This year we have been investing heavily into our internal platform, as we have continued to grow and staff has multiplied as a result. Some of our internal systems needed attention so we have re-built our business intelligence systems and we are at the tail end of year-long projects. We are expecting to launch the new version of our systems in the near future to radically improve our activity.

There has been a strategic view this year to diversify away from the UK. The UK market is under pressure from the Gambling Commission. You see it in the advertising restrictions, for example. I think we would share the sense with the rest of the industry there’s some uncertainty in the UK at present.

I think we have our hands full with the US. I very much plan on being the market leader in the US, so that should keep us plenty busy for the time being.

RELATED TAGS: Online | Land-Based | Industry | Sports Betting | Legal & Regulatory | Lottery | Affiliate | Feature
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