In a macro sense, what are the biggest challenges facing sports betting operators in today’s climate?
In the US, it is the fact that every state is different and regulated in its own way. It’s probably the single biggest constraint because it’s extremely expensive. If you want to roll out in a new state, you have to deal with all of the legal costs, you have to invest in all this new hardware. It would be ideal if you could run everything on one cloud and be able to service the whole of the United States. It’s a big barrier for entry.
Market access across different states is also completely different: you may have plans for your operator to join 10 or 15 states but, in practice, that might not be possible. You’re dealing with all the lobbyists, you’re dealing with all the land-based casinos, you’re dealing with all the tribal casino laws. There are a lot of moving parts – a lot of barriers – and it will be interesting to see if it opens up in the future. But, before anything like this happens, it will likely become more complicated and constrained.
Do you find you need to change your product in a significant way from state to state?
I wouldn’t say in a significant way, but I would say that different states have different demographics and different cultural features. For instance, you can go further down South and find that people are more into sports. In poorer areas of the country, you may find more of a parlay demographic. They might not have a huge amount of money to place up front, so they might put a $10 bet down and win $100 or $500. But then betting behavior changes. You go to New York City, and there will be people with more money, with $1,000 to place on a single bet. So I think it varies city by city.
But, in terms of the product that sportsbooks are offering, I don’t think it has to change too much. I think all of the terminology is essentially the same across the United States. In terms of American odds style, I think everybody is familiar with that across the country.
And then you have retail versus online. In the former, people are used to an older style book, or Vegas style lines. But I think that’s being flushed out now. Right after PASPA – two or three years ago, when sportsbooks started opening up across the states – people who were involved in the Vegas scene were pushing what they thought was the way forward. Now the online way has taken over completely and the old Vegas style is out. Anyone who is still hanging on to the Vegas dream, to how Vegas operates, has already fallen behind. It will be interesting to see what happens with that: whether Vegas changes and adapts or if they stick to their ways.
That leads well into my next question: what do you think the American sports bettor is going to look like in 18 months’ time?
Obviously, the way the younger demographic bets is different. They are very data driven and they understand sports very well. They watch a lot of it. At the tip of everyone’s fingers there is access to every event and every game. In the past it wasn’t necessarily like that. You perhaps followed your favorite teams or your home team and you’d bet on those.
The age of bettors will get younger overall. Especially in the States, where college sports are so big. You’ll have these students who perhaps can’t bet just yet, but who will begin doing so a few years after school has ended. So I think in 18 months or two years we’re going to be seeing a lot of this younger demographic who are betting. In terms of pure access to knowledge, younger people latch on and understand much quicker, especially when it comes to technology. As these younger people earn more money, betting will grow. We haven’t even seen the tip of the iceberg yet.
Do you see the profile of online casinos rising in the US? How much does Amelco have riding on the success of these platforms?
I think that the sooner the land-based casinos adapt and realize that online is going to be massive, the better. I do understand why land-based casinos are lobbying against online casinos – if I was in their shoes, I’d be doing the same thing – but they need to adapt and start providing these services before third parties and other operators start coming into the space; and offer advanced technology for iGaming.
Since Covid-19, we’ve been seeing things like streamed table games provided by the likes of companies such as Evolution. People can essentially be playing blackjack, roulette, any table game from the comfort of their own home. So, iGaming will definitely be a big player. Right now there’re only five states that permit it; but once that opens up, it’s going to be the next big wave in the industry. If you just look at the numbers in Britain and the rest of the world, you can get an idea of how big it’s going to be. I just hope the casinos can adapt and at least be part of the action.
From Amelco’s perspective, we have a full online gaming solution. We don’t build our own games per se; but in terms of the lobby, the online casino, the technology, we have the ability to integrate every single third-party gaming provider into the platform. In the States, we have a live social casino at the moment with Super Draft. We’re looking to roll out a few others in New Jersey and Pennsylvania in the next few months as well.
What do you think of the notion that one day in the not-too-distant future, betting on esports will be bigger than traditional sports betting?
Esports is an interesting one. The hype around it, from what I understand, is presupposed by the notion that an esports bettor is different from a typical sports bettor. Esports attracts a much different gaming audience than traditional sports would. That’s not to say that it’s never going to be bigger. My reasoning, though, relies purely on the continued popularity of traditional sports. You only have to go to a college game across the United States and see that every stadium is sold out to know the popularity of traditional sports. People are going completely crazy.
I understand that from an esports perspective, it happens indoors and it is a slightly different set-up, but I just struggle to see that happening anytime soon. It is an interesting space, so potentially in the future. It’s also a completely different experience. If you go onto a traditional sports betting platform today versus an esports betting platform, they are totally different products.