“ The truth is that there is no such thing as a ‘ United States market ,’ as all of the nation ’ s gaming activities are licensed at a state level .”
— Susan Hensel , former Pennsylvania gaming regulator operator was ever prosecuted for illegal gambling , whereas live broadcasts of sporting events often discussed odds , spreads and over-under point totals .
“ So , it was the combination of changing social norms , alterations in legal status and a reluctance to crack down on new forms of sports-related betting that coalesced into the rapid adoption of regulated sports wagering in many states and tribal jurisdictions . Some states and tribes became very comfortable with regulating online sports betting even when players were participating via their mobile phones , and this proficiency is now translating into other forms of remote wagering , namely online casino games .”
Governing Mish-Mash
One-time Pennsylvania gaming regulator Susan Hensel reveals that one of the most surprising aspects of the United States ’ online casino and sports betting scene for potential foreign firms is the patchwork nature of its regulatory system .
Moreover , a former two-term president of the International Association of Gaming Regulators , Hensel affirms that her Hensel Grad Gaming Counsel law and advisory firm now assists clients in understanding how to achieve their entry goals by efficiently working with state-based gaming regulatory systems .
“ The truth is that there is no such thing as a ‘ United States market ,’ as all of the nation ’ s gaming activities are licensed at a state level ,” Hensel says .
“ Companies seeking to do business in the United States must be licensed in each individual jurisdiction in which they are looking to operate and simultaneously comply with every one of these individual territories ’ laws and regulations .
“ Although there are similarities between the various states , there can also be significant differences . For instance , market access is not uniform , with some jurisdictions having relatively open access while others are more closed . Companies must understand the regulatory and business environment of a particular jurisdiction before making a decision to enter , and they must also take into account the time and expense burdens associated with obtaining licenses in multiple jurisdictions . We assist clients with these and other considerations .”
Perceived Potential
Hensel states that she and business partner Joe Grad , himself a past counsel for the Pennsylvania Gaming Control Board , advise a broad range of foreign firms interested in entering the United States ’ online casino and sports betting sector . She says that companies are interested in this embryonic market because they have identified “ a range of current and future opportunities ” and that her enterprise ’ s clients have enjoyed a great deal of success .
“ The spread of sports betting to most United States jurisdictions has attracted a lot of new companies offering products and services that touch different parts of the technology stack from operators to business-to-business ( B2B ) technology providers ,” Hensel says . “ There is also optimism that online casino will spread beyond the few states that currently offer it , and this is seen as a gaming vertical with tremendous growth potential .”
Fluctuating Fees
Adding to the mish-mashed nature of the United States ’ online casino and sports betting market is the variation in costs associated with getting licensed . Gemignani pronounces such expenditures can vary widely depending on the identity of the applicant as well as their products and target markets , while most American jurisdictions additionally require applicants to pay for their own suitability investigation while simultaneously depriving them of any control over the process .
“ As an example , the license application fee in Nevada is only $ 500 but the investigative charges can easily reach over $ 100,000 per person if the applicant is foreign ,” Gemignani says . “ This is because investigators will conduct forensic accounting on an applicant ’ s business interests while concurrently checking their sources of income to make sure such returns are consistent and legitimate .
“ Regulators will moreover review all bank , credit card and investment fund records and work with foreign law enforcement bodies so as to look for any ties to criminality . Investigators may also inspect an applicant ’ s assets in foreign locations and scrutinize all computers , data storage devices , communications and cloud accounts .
“ In other states , such fees are more significant , including in Pennsylvania , where applicants for a local online casino operator license must begin by paying $ 1 million . There are also different charges in many jurisdictions for manufacturers , service providers and significant investors . The net result is that the costs can vary widely , and it depends on the company , its executives and key people , its product or service and the target jurisdiction .”
Initial Introduction
Online casino operator Kindred Group was among the first group of foreign firms to enter the embryonic American iGaming market via the New Jersey launch in May 2019 of its Unibet brand , which came courtesy of an alliance with that state ’ s Hard Rock Hotel and Casino Atlantic City
AUGUST 2023 www . ggbmagazine . com 19