ICE North America Digital - Day 2 ICE NA Digital Event Guide - Day 2-v6 | Page 12

INTERVIEW
Golden future awaits a thoughtful approach
Online sports betting will provide dollar-hungry states with a ready-made revenue
stream when the Coronavirus pandemic dies down, according to Brandt Iden –
but they must be careful not to kill the golden goose.
After four years of intense efforts, State
Representative Iden successfully passed
legislation legalizing sports betting and
iGaming in December 2019 and now
hopes regulators will have operators
approved by the end of this year.
He believes that its successful
implementation in the Great Lakes State
will now encourage others to speed up
the modernization of their own legislation,
particularly when live sports return, not
least because of the fiscal benefits the
move would bring.
But he warns that the clamour for cash should
not blind lawmakers to the very real need for a
competitive tax rate and a sensible regulatory
framework to prevent the move being strangled at
birth.
He said: “People are itching for sports to come
back as there is not a lot on the television. We have
a glimmer of hope with the PGA this summer and
football and soccer in the autumn, and there will be
a lot of pent up demand to bet on those sports.
“There will also be demand for revenues from states
looking to get back on their feet as budgets will
have taken a major hit. The temptation is to impose
high taxes on industries like betting and gaming, but
they need to be very cautious that they don’t kill the
golden goose.
“Sports betting is about small margins and we
need to support them with low entry fees and low
taxation, otherwise operators will not participate.
As a result, bettors will continue to bet on the black
market – which does much more harm than good to
them and the industry.”
Iden, who will be speaking at the forthcoming
ICE North America Digital conference, highlights
Virginia’s recent decision to enact sports betting
into law from July 1st as an example of the potential
pitfalls.
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Whilst welcoming the legislation, he
believes the sizable licensing fees,
level of taxation and, in particular,
background check costs for each
principal, which could affect up to 20
employees at some companies, could
prevent participation by all but the
biggest concerns in the market.
He added: “Personally, I think 15% tax
rate is too high, but fees of $50,000 for
background checks are just prohibitive.
You cannot kill these companies with
fees and taxes as their offering will just not be
competitive.
“I get why they did it, but states have to ask
themselves does this make sense and is it practical?
The same can be said for not allowing Virginians to
bet on their university teams when those sports are
up and running.
“They will just go over the border to West Virginia or
continue using their illegal bookmaker. States need
to be thoughtful about how they introduce legislation
and then maintain it – otherwise they will continue to
drive it underground.”
Iden is set to discuss sports betting and gambling
regulation in the US, on 12 May. Click here to add
to your schedule of sessions you want to stream.