Pity the US sports-betting start-ups. Getting a consumer-facing proposition to the point of launch and beyond is a hard business, regardless of the jurisdiction, but when the landscape is yet to be truly formed then it makes life doubly difficult.

“As it stands there’s a lot of excitement but it’s still unclear what will be needed, and what
will be the restrictions, before you can get up and running,” says Rob Morris, chief executive at online gaming platform provider and agency Two Up Digital.

There needs to be an understanding of the licensing and regulatory frameworks in order to
actually facilitate the work – and until those are set, preparatory work is necessarily

It is one of the reasons why many believe the opportunity in the US is one that is reserved for current gaming and betting operators in the US, which in the main means bricks and mortar casino operators.

“As it stands there’s a lot of excitement but it’s still unclear what will be needed”

“If you mean a completely new venture, then I think they’d struggle to even get off the
ground in any credible way,” says Richard Thorp, business development director at sports backend provider FSB Technology who suggests the indications post-PASPA are that prospective sports-betting regulators are looking to give established casino operators “the first shot” at rolling out sports-betting.

My kind of town

But at least some are willing to challenge the consensus view and one such is Frank Ignatius, the president and founder at BetChicago, which as its name suggests is an operation hoping to take advantage of any regulatory move in Illinois.

He suggests that his company’s challenge lies in confronting the assumption that the casinos and racetracks have “this eternal right” to sports betting, at the expense of other potential challenger brands.

“The idea that someone with a facility full of blackjack or craps is somehow uniquely
qualified rather someone in the technology space or with another connection with the sports betting market is a false one,” he argues.

This goes against what we have seen so far in terms of the supply deals announced, which have indeed been mainly about established US gaming names in states such as New
Jersey and Pennsylvania quickly puting pen to paper with European-based suppliers.

Indeed, BetChicago itself has signed up with Sportradar and its Managed Trading System
(MTS) product for its own backend supply. “We bring the scaffolding,” says Neale Deeley,
vice president of gaming at Sportradar.

“Fixed-odds betting isn’t new to most Americans, it’s just been unavailable”

“We can support organisations like BetChicago with the tech, the components and the
infrastructure that a start-up otherwise wouldn’t have. Clearly, they do the marketing and
have the knowledge of the market.”

Ignatius believes the opportunity lies in being able to rethink the marketing of sports betting, not the mechanics, pointing out that BetChicago is already up and running as a content site running fantasy games and editorial aimed at the Illinois audience.

“We are a marketing and technology company, plus media,” he says. “Our marketing is more targeted and connected to the customer, more than the casinos. Those are the elements of successful sports betting business. These are the elements that will make the business successful.”

As with other newly-regulating markets, the key for all operators in the US will be whether
they are successful in switching existing sports-betting activity from the black market to the regulated space. As Morris says, fixed-odds betting isn’t new to most Americans, “it’s just been unavailable,” and the recent rise of the fantasy sports providers is proof of the potential scale of the market.

“Bricks-and-mortar casinos, racetracks, sports news publishers will all be looking to
understand how to maximise a route into the online industry and so opportunity exists for
both platform providers and agencies such as ours that specialise in the acquisition of
customers,” he says.

The US is a “greenfield opportunity” as Thorp points out where “everyone will have to make
it up as they go along in some meaningful manner,” and that means that none of the new
market entrants have to follow any given path.

“Ultimately we’ll have to abide by what each state wants”

Even if that path has a Nevada sign hanging over it. “We need to look at different markets,”
says Ignatius. “Nevada has become the de facto model for the US and I’m not so sure that is the right way to approach it. The illegal market doesn’t follow the Nevada market, for
instance, and it has grabbed most of the market.”

As for when BetChicago hopes to launch, that is in the lap of the Gods – or in this case the
Illinois legislators who will ultimately decide on the framework for the market. As with other US states, the moves being made in Illinois are a positive step but as Morris says, when it comes to potential end states, all potential outcomes need to be considered.

“Ultimately we’ll have to abide by what each state wants and so that will impact what is possible,” he says.