Show-Me the regulations

Where is Gambling.com Group currently live? And what states are you looking to expand into?
We’re live in every regulated, fully legal market across the world, and in every state that offers online sports betting and online casino; and we have been post-PASPA.

And Missouri would then be the next state to expand into, if and when it goes live?
Exactly. We’re looking at states like Kentucky, North Carolina and Missouri. Over the past six months, we’ve gone live in Massachusetts, Ohio, Maryland and Kansas; so we’ve been exceptionally busy. State launches are hugely important for us, as is the legislative and regulatory process to launch. We make sure we’re able to play by the rules and send new depositing customers to marketers, which is our end goal. All states are important to us, but the ones that are soon-to-be live are increasingly more important.

Speaking of regulations and legislation, what bills have already passed related to sports betting in Missouri?
Nothing is passed fully. There’s a sports betting bill that’s gotten through the house in Missouri. It’s in the Senate right now. You have a couple of representatives pushing the bill and a couple of senators that are not necessarily blocking it. They are doing their best to make sure it’s in the best interests of the citizens of Missouri. We hope that the Senate will decide to pass it. Then once it passes the Senate, it will go to the Governor for signature. It’s something we’re watching very, very closely.

Who has been in support of those bills and who is leading the opposition?
Dan Houx, the House Leader, has been a huge proponent of this. Senator Denny Hoskins has been, I wouldn’t say the antagonist, but he’s the more difficult person for us to move over to support of the bill. We need his support. There’s a lot of moving parts, and a lot of other people involved, but those are the two individuals I think who are getting the most headlines right now. The way they are apparently collaborating should help this bill get pushed through. Something we see in other states that doesn’t necessarily bode well is when you have two factions that are butting heads and not communicating. In Missouri, it does seem like both Representative Houx and Senator Hoskins seem to have a very clean, open line of communication. This bodes very well for the industry and for the folks in Missouri that are supportive of sports betting.

What regulations do other states have that you think Missouri would benefit from?
I think one of the statutory pieces that’s very advantageous for the industry operators, and everyone, is the tax rate is very acceptable at 10%. You compare that to states like Pennsylvania and New York, where the tax rate is a multiple of 10%, which can make life more difficult for operators. It affects the entire ecosystem. When top-line revenue is drilled down, the actual dollars the operators are able to gain affect everything, which affects the end user. It affects everyone in the supply chain of sports betting, from the actual suppliers, to the payment processors, to the affiliates. That’s one thing on the legislative front that Missouri has done very well. They’ve also given a great deal of access into the state, where all of the 13 casinos who are owned by large, publicly traded companies like Caesars, Penn and Bally’s (and some smaller ones), are able to offer three sports betting skins. This means you could potentially have nearly 40 brands in Missouri. That purely embodies American competition.

That’s a big market.
Yeah, it is a big market and it is more synonymous with the UK and parts of Europe, where there are dozens and dozens of brands. In markets like Arizona, Indiana and Michigan we see that being very successful, compared to a state like Connecticut, which only has three operators. The way Missouri’s bill is written right now is very advantageous with the tax rate, the amount of competition and potentially the timing, getting sports betting live – assuming things get through the Senate and through the Governor’s Office.

Speaking of going live, you made a comment about how the launch of Ohio hadn’t gone that well due to timing. Do you think timing could be important with other states going live?
Totally. I think it takes some awareness on what is happening: 1 January for Ohio, it’s a big, round number; it’s the start of the year. But the implications of that, given the sporting calendar, and people being off for holidays throughout December and January, can make life difficult. It doesn’t necessarily yield the best results. You compare that with a state like Arizona, which launched the first week of the NFL season years ago: that market got off very efficiently and was able to see results very quickly. In Ohio, sports betting had to be live by 1 January 2023, but the fall and the early winter is the most important part of the season for sports betting. NFL football is being played; collegiate football is being played; baseball is still getting played in September and October and the NBA tips off in November.
These are key dates that really help consumers get into the market. Operators are able to generate more revenue and, frankly, that revenue yields tax dollars. If Ohio launched on 1 September rather than 1 January, they would’ve had much greater revenue. In the long term, from a very high level, does a couple of months make a difference? Probably not. But launching sports betting on a public holiday is pretty tough to do. I think that’s the only real negative, if I had to pick one on Ohio specifically. The regulators in other states will begin to listen to operators, affiliates, suppliers and the whole ecosystem to understand: if we were to launch, what would be the best time to do it? And we have suggestions and ideas on the best way.

Other than the timing, what else would hypothetically make a successful launch in a new state?
One thing is that’s very important, specific to us, is making sure the regulator understands what each licence holder does. An operator is very clear: they’re in the business of taking bets from consumers; but what do all the suppliers do? What do the payment processors do? What do affiliates do? We’ve been increasingly trying to help regulators understand. We are the tip of the spear when people want to understand what’s available. Large affiliates dominate Google search results. Any time someone’s looking for something about sports betting in a specific state – or to find out what the best sportsbook is for them; or to find out when sports betting is going live; or to find out the tax rate; or to follow the bill through the House and the Senate – they’re able to go to these websites that Gambling.com owns to understand. Regulators would benefit from not necessarily understand. This is our business; this is why we’re in business, this is what we do for our consumers, this is what we do for operators and this is our suggestion on how the rules and regulations should be written. The most important piece is that consumers are safe and protected. It’s a large effort across the country to eliminate black-market operators or offshore operators; and that’s something we can combat effectively, as we’ve done in a number of states since the overturning of PASPA.

We’ve mentioned more favourable tax rates, but are there any states where they’ve approached sports betting in better ways for their populations?
I think it’s different. You look at a state like New York, and maybe the tax rate is prohibitively high, but New York is one of the largest states in the country. Each state is really different. It’s easy to just bucket them all in and define them by population, but the political climates are different and the sentiment is different. All of these things are part of the cocktail that has to be considered. I wouldn’t say there’s one perfect way. What I think most states are trying to do is take the best bits from each state. The really strong regulators talk to other regulators to understand: these are the hurdles, this is what we would have done differently and if I had to do this over, I would have done x, y, z. You have a number of different ways to regulate, predicated upon things people aren’t in control of. I’m not in control of how many people are in New York state versus Kentucky or Missouri. But you are in control of how many operators are in which states, or what the licensing regime looks like.

Do you have any final comments about Missouri and where it’s headed?
I think Missouri is exciting. If it all goes well, we’ll be operating and having sports betting legal at some point in early 2024. With the amount of professional sports teams and collegiate sports teams, there’s definitely an appetite there from constituents. There’s a lot of neighbouring states that have sports betting, so a lot of revenue is leaving the state. The sooner Missouri gets up and running, the better chance they have to capture that tax revenue to fund education, water programmes and other things that benefit the greater good of the state and the folks that pay taxes there. It’s very hard to find reasons why sports betting shouldn’t be legal, and I think that’s what the Senate is carefully looking at right now. Hopefully everyone can come to an understanding and give the folks what they want in Missouri.