Entering the US iGaming Market Is Not for the Faint of Heart

I think the biggest challenge by far was two or three things. One, educating the politicians about the value proposition of iGaming. It creates jobs, it taxes, it’s consumer protection oriented, it has responsible gaming tools. That was one piece.

The other piece is educating the brick-and-mortar industry, which was against iGaming, and letting them know that this is a good opportunity for them to have another vertical, to be transformational. To turn their retail proposition into digital and get the benefits of that.

And what’s important to understand is the brick-and-mortar industry in America is an institution and they had a lot of power and muscle to try to defeat iGaming. Now they’ve all embraced it. They love it. It’s very good for them because it’s another source of revenue.

And then the final thing, because America is unique and very different, is that most other jurisdictions do not require tethering in iGaming. So what we did, which was to allay the fears of the brick-and-mortar industry, because I represent most of them, is to say, okay, you’re tethered. In order to have an online operation, you have to be tethered to a brick-and-mortar casino. That doesn’t take place anywhere else in the world. And I think there are already discussions in America about untethering.

I’m very involved in responsible gaming practices. I’ve served on the Federal Affairs Board for the National Council of Problem Gambling. I’ve also served for the last six years, soon to be seven, on the Entain Foundation for RG.

I think the gold standard, or what I like to call the platinum standard, is what we’ve done in New Jersey with RG. It’s utilising several different channels. Number one, collaboratively working with the operators so that you’re not just putting across regulations that can be very burdensome and really not have good outcomes.

It’s focused on education and awareness, prevention, and then, as the last resort, treatment. I work with companies like Birches Health, which was founded in San Francisco by Elliott Rapaport and is now based in New York City. They provide fully insured treatment—so you’re not paying a lot of money out of pocket, just your deductible, usually like $20 or $25 for a therapy session, ongoing in-person therapy and continuous virtual therapy.

Those are the verticals. I don’t believe in banning things. I believe in educating folks. There’ve been efforts to ban proposition bets, efforts to have affordability checks, and to limit the amount you can gamble. I don’t believe in any of that because I think that pushes the consumer to the black market.

What you need to do is have things like markers of harm where you identify behaviour patterns that, if they change, can lead to problem gambling. Then you offer the consumer pauses, timeouts, self-exclusion, things like that.

But there’s no bulletproof solution. It’s an evolution. And as you learn more, you adapt. The other thing is there are ways to utilise AI, but when you’re dealing with RG, it has to be more personalised.

I think there are a couple of things. Obviously convenience. More and more consumers are finding it easy in their casual time to play on their mobile device or laptop.

I also think there’s been a huge marketing campaign by the industry, and all those things together led to rapid digital growth. But at the same time, certain resort areas have not seen their usual foot traffic. That has more to do with the current state of the economy in America—things are becoming very unaffordable. Hotel rooms, restaurants, entertainment, etc.

A lot of folks in America have decided to go to Europe this summer instead of resort casinos in America. That’s something the retail proposition has to navigate better, maybe making things a bit more affordable.

In the digital world, younger people are finding it more convenient and comfortable. They love digital—they use apps for everything. We’re seeing a massive growth in people’s use of Amazon instead of shopping malls. That’s just the evolution.

I think we’ll continue to see growth, particularly as older people age out. In markets like horse racing and lottery, you’ll see more 20- and 30-year-olds using their devices to gamble instead of visiting a property.

As you know, I was the campaign director and coordinator for the first state in the nation to bring iGaming, through my representation of a few organisations, including PokerStars.

New Jersey was first, then Delaware, Nevada, Michigan, Rhode Island, Pennsylvania, and West Virginia. So we only have seven states right now. Unfortunately, that’s the biggest shock to me—that we don’t have more states.

We saw a huge boom with sports betting, but not the same with iGaming. The reason for that is that the industry has been very shy at telling a great story. And that’s frustrating for me. I feel like I lobby the industry more than I lobby government officials.

We have a great story: we create jobs, we’re legal, we’re licensed, we create tax revenue, we have consumer protection. We need to educate politicians more because they still think we’re on the dark side. We have a great story to tell and we need to tell it.

In terms of states, I think we have potential in Maryland, Indiana, and Illinois. I also think there’s an opportunity for Florida.

This year we only have two governor’s elections—New Jersey and Virginia. Next year there’ll be many more, with younger people coming into office. That’ll give us another opportunity. So I think in five years, hopefully we’ll have at least double the states, if not more.

Well, yes. I think in many regards the US has done well, and our regulations are very good. But the US could learn from the fact that in Europe you still have retail separate from digital.

I think there’s going to be a conversation down the road about untethering. That’s something the Europeans got right.

There are also a lot of bad regulations in Europe that I think the US can learn from—to make sure we don’t go down the same road.

What I like about what I do is that regulators are open to discussions, so we’re not providing huge tax burdens on operators. Because when that happens, operators tend to shut down and go away, which creates even more of a black market. Those are the things I think we can learn from Europe.

If you have a good product and you’re operating legally outside the US, I strongly encourage you to consider coming into the US. But there are three pieces of advice.

Number one: it’s not for the faint of heart. You need resources and capital to deploy, to come in, get licensed, and build a good compliance team to set up your US structure. That requires capital. You can’t just open up a website.

Number two: I always tell my clients—New Jersey has the best regulatory regime in the world. It’s both pro-operator and consumer-protection orientated, and it’s willing to evolve. If you can get licensed in New Jersey, you can get licensed anywhere in America. It’s the platinum standard.

And finally: make sure you can build relationships with US gaming companies, because you’ll need to tether with them. You’ll need good risk management, human resources, and an ongoing operation.

If you only have a few dollars, it’s not your time to come to America. It’s expensive to get in—but once you’re in, it’s very rewarding.