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One size does not fit all The context of each state’ s local gambling industry will also be key as it will affect regulation. Some states will not regulate online or mobile betting, essentially to help drive footfall to their local casinos. Pennsylvania looks like it will put up high barriers to entry to deter any upstarts from even thinking about entering, while New Jersey, with its numerous international operators and long-standing history as a gambling jurisdiction, will be more open to new forms of gaming( and the subsequent tax revenues).
However, the likelihood of seeing suppliers and operators licensed quickly and easily across the US is far from a fait accompli. One industry contact who works for a leading US casino group agreed to speak to iGaming Business on condition of anonymity and said:“ It seems to be widely assumed that incoming suppliers and operators will get licenses and it will be fairly straightforward, but the level of regulation in the US is more intense than even the most intense regulatory framework you can find in the EU. For example, New Jersey is the most accommodating jurisdiction in the US for the igaming sector. But if [ European ] executives think New Jersey is tough, they will find other regulators to be a lot more intrusive in terms of allowing them to work in their states.”
The contact adds that an oft-mentioned scenario is that operators and suppliers will go live with permitted products and get‘ retro-licensed’ by local regulators.“ That won’ t happen in many states. A state like New Jersey had certain objectives when it regulated igaming but for other states the priorities are different. They will be a lot more stringent and in depth when it comes to background checks and that level of regulatory scrutiny is not something many European companies are prepared for.”
The other key issue is whether there will be‘ bad actor’-type regulations, or how much importance is placed on suppliers working in unregulated markets.
“ Many companies have chequered histories which regulators aren’ t aware of,” says the US contact.“ Much of the focus might be on whether they’ ve ever taken US bets, but issues such as the owners’ history or whether they operate in unregulated markets currently, and depending on which ones those are, I believe will play a part.”
“ If [ European ] executives think
New Jersey is tough,
they will find other regulators to be a lot more intrusive in terms of allowing them to work in their states”
Such a turn of events could cause many EU companies problems. Although most of them operate in regulated jurisdictions, they also generate substantial revenues from unregulated markets. How US state regulators look upon those activities will play a key role in how, or rather who, will be able to operate at state level.
Having said that, a company that is licensed in Nevada or New Jersey will have a good chance of passing regulatory scrutiny in another state; though it should still be prepared to go through the whole process afresh.
“ The US will be a slow burn with individual states wanting to get each aspect – tax rates, integrity measures, product restrictions and consumer protection – right at the first time of asking”
Matt Stephenson, Betgenius iGamingBusiness | Issue 111 | July / August 2018 73