Speaking as part of a Geocomply webcast this week dedicated to the abolition of PASPA, iGaming Capital director Melissa Blau offered a reality check about the implications of an integrity fee for operators and how it would impact profit margins that are already tight.

She told the panel: “Having worked in Europe in online gaming for 15 years and having run a white label sportsbook, this is not a new topic that wasn’t already an issue in Europe. I understand the argument why the leagues feel that they deserve a fee. It’s their content and we’re making money off their content. But all I can say is look at the profitability of sports wagering on a country by country level and how you implement that on a state by state level – I would urge the sports leagues to look at the profitability of sports wagering whether it’s retail or online. Because it’s not a hugely profitable industry with a vast amount of margin in it.”

Blau advised that running a sportsbook is far more costly than a casino or poker operation. “It’s a lot more complicated with many more moving parts,” she commented. “It has a lot more content and human resource fees that you have to be responsible for. So when you start adding integrity fees into the mix in addition to the payments to your location, the promotions, the software providers and the gaming tax, you get down to a profitability level that’s scary.”

Blau also offered her view on how stakeholders in the fantasy sports sector will fare in the new post-PASPA landscape. “I think that they are particularly well positioned,” she said. “They have a lot of experience on the regulatory/lobbying side. They also have vast databases of people who clearly follow sports – whether they do it through sports wagering or a fantasy capacity. They are sports enthusiasts that are willing to put their wallet down to participate.”

How they will be positioned within the market, advised Blau, will depend on the state and whether they come in as a white label or as a marketing company/affiliate, or whether they come in directly as an operator. “I think that will vary depending on the state, but I do definitely think they have a place in this market,” she concluded.