SAN DIEGO – European suppliers and technology providers for sports book operations in the U.S. sounded a cautious note last week about overregulation and warned of a potential backlash from consumers overwhelmed by this new era of sports betting.
It was part of a panel discussion led by Clarion Gaming at the National Indian Gaming Association convention and tradeshow. Last May, the U.S. Supreme Court paved the way for betting nationwide by striking down a federal ban on single-game wagers outside Nevada.
The panel included Kambi Group Chief Commercial Officer Max Meltzer and Witek Wacinski, head of strategy at GVC Group. Clarion Gaming Director of Industry Insight and Engagement Ewa Bakun moderated.
Wacinski said there should be no government requirement that betting operators purchase data from the leagues. Data quality is vital and what they base prices on, and operators are happy to pay for it as they do in other markets.
“There shouldn’t be any regulatory reasons for data costs to be baked into anything,” Meltzer said. “Having an open data market works really well around the world. We try to avoid monopolistic ownership and distribution rights of that data, otherwise you are creating a situation where they can charge whatever price for data.”
Wacinski said he doesn’t blame leagues for trying to influence regulations and secure integrity fees that give them a cut of the action, because they’re stakeholders in the industry. But he said Europeans have done a better job maintaining relationships between sports leagues and betting operators.
“We have found (the leagues) have overreached a bit, and we have push back on that, but that didn’t stop us from signing deals with them with the NBA, MLB, NHL among others,” Wacinski said. “We look forward to utilizing the assets – the data – and making our product better, which is the way to go.”
Wacinski said American betting operators can improve on what Europe has already done as sports betting is expanded in the U.S. That means staying ahead of problem gambling and learning what kind of promotions work and don’t work.
“I do worry a bit about the exuberance of the industry participants,” Wacinski said. “It seems like everybody wants to get into sports betting – operators, leagues, media companies. I worry that the general consumer could get overwhelmed, and there could be a backlash toward sports betting. We need to be careful and try to self-regulate as much as possible before the need for external regulation arises as it did in Europe.”
Meltzer said margins are lower in the U.S. than in Europe because there’s more reliance in the U.S. on betting before the game starts, rather than in-play wagering and proposition bets. He said that will change in the U.S over time.
Meltzer said the first-ever March Madness betting for East Coast casinos in March has shown up in casino revenues, in both sports betting and in other casino games and offerings.
European sports books have a 15 to 20 percent margin, Wacinski said, while it’s 5 percent to 6 percent in U.S. books. He said there’s a lot of potential because the U.S., unlike Europe, has college sports and more betting opportunities with other sports.
“The introduction of legal sports betting (in the U.S.) has changed sports betting globally,” Wacinski said.
Meltzer said American sports are great for in-game betting – especially baseball, with its frequent periods of inaction. “There’s so much instant betting that resonates with American sports,” Meltzer said. “I think it’ll be fantastic. With March Madness, there’s betting on three-pointers. We’re seeing Silicon Valley doing sports betting start-ups. That will really advance in-play.”
Meltzer, meanwhile, talked about the opportunities to work with tribes, saying it’s been a fun experience trying to understand how to approach a tribal community.
“Every tribe is different, and it’s ridiculous to think otherwise,” Meltzer said. “The approach here is to respect everyone.”
The panel urged sensitivity to the needs and desires of the tribes and said attendees should think of tribal casinos like locals’ casinos in Las Vegas, which cater to people who live nearby and visit the properties often.
Meltzer recommended that tribes who don’t yet have legal authority to offer sports betting introduce it for free as a social amenity, like Mohegan Sun did recently in Connecticut. That will help acquire customers when they do open a book, he said.
“It’s a good way to test and learn and start building operations… when it becomes real money, you can be market leaders,” Meltzer said.
As for the concerns of European companies coming to the U.S. to offer their technology and solutions, Meltzer said no one should dismiss a company because they have their origins in Europe. Europe has some of the best sports book solutions in the world, he said, and sports betting behavior resonates globally.
“We understand the American customer,” Meltzer said, “and we’re as ready as anyone.”
