Technology and regulation remain significant hurdles to progress for igaming suppliers as they strive to build their brands across multiple US states. That was the leitmotif during a gathering of key industry figures during last week’s SBC Digital North America conference for a panel session dedicated to the topic of platforms in the growing sports betting market.
Kresimir Spajic, former SVP & MD, Online Gaming and Sports Betting at Hard Rock International noted that there are multiple challenges related to technology.
“I would say that the biggest thing is the pace of legislating sports betting in the US. Now we have 26, 27 states that have legalized sports betting. And you’re trying to be one of the first in the market. History has shown that usually the brands that have entered the market first have the chance to keep some of those leading positions.
“At the same time you’re trying to launch into multiple markets while there are different types of regulations that impose different types of technological requirements on the platforms that you need to use in these markets. And I think this is the biggest problem right now because the regulations are not unified across the different states and the different states have different bases of regulations.”
Manuel Stan, SVP, US, Kindred Group, took a three-pronged approach. “From an operator perspective we have three key things to look at,” he told delegates. “You have the cost, you have the time to market, you have the flexibility. Obviously we all know how challenging it is to have a profitable business in the US.
“Trying to keep the technological platform cost is a key focus for everybody. And just looking from the hardware perspective, you have to replicate hardware setups in multiple states and that’s just not a scalable way to do things.
“Secondly, time to market. Being early in the market is key for success in different states. We have seen in lots of the states that the bigger operators – the market leaders – are the ones that have entered the states in the very early days.”
Lastly, he explained, is the flexibility of the platform. “We are an industry where from a product perspective there is very little room for differentiation. Everybody is using pretty much the same set of suppliers. So differentiating from a platform perspective is quite key. Finding a platform partner that is able to be flexible and can adapt their technology to your needs, that’s key too.”
Erik Nyman, President Americas, EveryMatrix, turned the focus onto hosting. “We are required to set up data centers in each and every state,” he noted. “In my previous experience I remember with NetEnt in New Jersey we had a desire to use that same hosting for Pennsylvania and then you had new regulation with the DoJ which revised its opinion on the Wire Act which forced everyone to put their equipment in each state. That is frustrating to not see that harmonization between states.”
Nyman was also critical of the level of paperwork and the process of going through all the due diligence for each and every state. “That’s something we spent a lot of time on,” he said. “Different labs in different states – we’re used to working with GLI in Europe, here you have individual labs in some states.
“That’s really where I see it and I think that what is interesting to look at is there are not so many platform providers in the US market today compared to Europe and I think there’s an opportunity for a company like EveryMatrix to come in and really look at the different customers and what we can offer.
“Because we are at the stage where there will be specific development requirements for the tier one and large customers that they expect. And they are also expecting their suppliers to tag along with them into whatever states they go into. You can certainly not serve all, but you can do a good job with a few of them.”