Luke Massey

23 August 2021
Commentary, Europe, Features, Latest News, North America, Slider Pictures

Comments Off on What to Expect When Entering the US Market: Unpacking Benefits and Challenges

2021 heralds a new era for iGaming in the US market. To call it a “gold rush” is probably an understatement; Online casino, sports betting, daily fantasy sports and esports betting brands around the world took advantage of the tremendous opportunity that emerged when the state ban on online gambling was lifted in 2018. The race for supremacy has begun.

Although it has only just begun, the US gaming market, with its sheer size and tech-hungry population, is growing rapidly with no end in sight. Total gambling revenue in the country was $ 96 billion in 2019 and $ 119 billion in 2020 – up 21% year over year – and is expected to grow steadily.

Based on market research, the chairman believes from Internet Vikings, Jesper Kärrbrink that the US has the potential to outperform the more mature European market and soon become the most lucrative iGaming market in the world.

But for gaming companies, that means “jumping in while it’s hot “Not as easy as it might seem at first glance. Similar to Europe, where each country sets its own rules, in the US each of the 50 states is a separate jurisdiction, where state law has a mandate to decide whether or not to allow different types of online gambling. State regulators set the rules that must be followed by operators and gaming-related providers alike.

On a broader level, based on their own understanding of how the gambling market works – combined with the perceived will of voters, lawmakers dictate, what types of bets are allowed. In other words, all forms of wagering are illegal in certain states. Others only allow sports betting. Others also allow daily fantasy sports. However, there are some where online casino games are legal.

Another factor that varies to some extent from state to state is the rules governing how operators do business with third party marketing partners (commonly referred to as “affiliates”) and the tactics they can use to reach potential new players and thereby expand their customer base.

Government regulations also affect the structure of the IT infrastructure that operators and B2B providers can use. In some cases, servers that store player and financial data and perform gaming transactions must be located in stationary casinos, while in other cases it is sufficient that they are located within state lines. In addition, electronic gambling is not allowed to take place between one state and another, as stipulated in the Federal Wire Act 1961.

This means that operators and providers must be licensed in each state in which they offer their services. To make matters worse, the licensing process and license fees required – although often similar from state to state – are usually not identical, so each must be viewed as unique and treated individually.

Fortunately, you can apply for two or more licenses at the same time, and the states offer temporary licenses that allow your business to get online within two to six months of providing all required documentation.

Internet Vikings recommends all operators and B2B vendors entering a particular state market would like to consult a gambling law expert first and preferably work with a checklist to ensure that all major licensing and technical requirements are met.

Is it worth navigating this fragmented regulatory landscape? If you look at the statistics, it certainly is. New Jersey is a groundbreaking example of how successful online gambling can be. Despite a population of less than 10 million, New Jersey is now the third largest regulated online casino market in the world after the UK and Italy.

In addition, Pennsylvania is one of the five largest online casinos with a population of around 13 million people. The world’s casino markets soared a little over a year after online gambling began in July 2020. It is only a matter of time before the majority of states are fully legalized. But how does a foreign operator choose which state markets are best and most suitable?

The catch is that online brands generally have to work with a brick and mortar casino and each state has to determine the number of “skins” available “Limited (ie the number of brands that can be associated with each physical establishment). ), which creates a limited number of opportunities to operate in a particular government market.

These opportunities in the more established national markets have usually already been exploited by the larger operator brands. In other words, operators with sufficient funds to make serious skin arrangements and build brand awareness, attract online traffic, and pay the relatively high cost-per-acquisition fees to their outside marketing partners – up to $ 500 to $ 1,000 compared to in Europe from 200 €. You can sometimes lower these expenses through membership-based loyalty program databases from mining partners for potential new player conversions.

However, due to the enormous potential of the national market, we expect a growing number of EU vendors and smaller operators to compete for market share. This can be achieved in the larger state markets if skin deals are to be found, as even a small percentage of the market share could be valuable enough to warrant such a significant investment. However, it would be a mistake to overlook smaller state markets like West Virginia, where the cost of entry, competition for player attention, and deposits are much lower.

When it comes to doing business, many operators look to the US as their focus Europe for B2B providers, as they are familiar with the technical aspects of online offers and can provide the operators with proven software platforms.

Internet Vikings established its presence in the USA in 2020 and brings European know-how as an EU-based global leader in cloud hosting and B2C marketing solutions. Internet Vikings can help both operators and B2B vendors set a course for licensing and technical requirements in each state jurisdiction Heard from our customers is that the licensed hosting options are very limited and costly, and in addition to everything, operators need to find out different. So we are trying – in some key states right now – to rethink this facility and offer hosting services that are just as reliable and secure, but also more agile and cost-effective. ”

As more and more states legalize online gambling, Internet continues to acquire Vikings the required vendor and, in many cases, vendor licenses to enable them to meet their customers’ fully compliant operational hosting requirements in any jurisdiction.

This article was written by the Internet Vikings content team, with contributions from Chairman Jesper Kärrbrink and Elena Kvakova, Head of US Expansion.

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