The real competitive threat in US sports betting sector – VIDEO

The biggest competitive threat facing suitors to a newly regulated American sports betting sector will hail from the long established and unregulated offshore betting firms, according to panelists at the 2018 Betting on Football conference. Speaking at the high profile event in London earlier this year, Sportradar’s Robin Roy and Sportingbet founder Mark Blandford, warned of the need to keep taxes low and access to mobile forms of betting high if states are to realise the full potential from sports betting. They were joined by Paris Smith, CEO of Pinnacle, and moderator David Sargeant of iGaming Ideas. 

“The competition that a casino in the US will face, especially in the beginning, it’s not going to be a casino next door,” advised Roy. “It is going to be the offshore market because so many punters are already using those offshore sites and there are a lot of hurdles that regulators in the US have to overcome.

“They need to take a few things into consideration. They need to keep taxes low. We’re seeing right now in Pennsylvania they’ve proposed a very high tax. It may preclude operators from going in there and Pennsylvania could lose out on this. They might have a few smaller operators but it’s not going to be a gold rush like some of the other states if the taxes stay the same. With high taxes comes less of a return for the punter and it’s more likely they will see they are getting more of a return on their investment offshore.”

He added: “If the states don’t allow mobile betting, which some of them are already leaning towards – and only doing brick and mortar where you have to drive to the casino, walk in there and make a deposit and place your bet in there – again that’s going to be self defeating. Because offshore has mobile, it has online, it’s convenient and everything is moving that way. Upwards of 70 to 80 per cent of sports betting is being done on mobile now and if the regulators don’t allow that the market’s not going to reach its full potential.”

On taxes and regulation, Blandford warned that operators attempting to do business under the auspices of a high tax regime will struggle. He said: “France is in a high tax regime. Guess what, the French market has not really grown. It’s really tough, and strict regulators also have a tradition of putting other objections in the way; of not encouraging through bonusing and various types of promotion that makes your offering competitive. And if this goes too far it just plays into the hands of the offshore industry.”  

The breakdown of what the PASPA ruling means will be investigated during September’s Betting on Sports Conference, which is being held on 18-20 September 2018. One of the main tracks of the event is dedicated to the US market and where the opportunities will lie.

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