Chris Walsh, Corporate Sales Manager, Viadex
Trade shows bring us together
It was great to meet so many friends and colleagues at G2E, from gaming and technology companies, and share the excitement and concerns around sportsbook in the US.
These events are always stimulating, there’s always a lot to learn. Trade shows are the ideal forum for building and cementing relationships among people with parallel goals and very similar requirements around technology, systems performance, and dealing with the critical and decisive factor of latency.
Viadex is a long-time regular attendee across the whole global circuit. I was at G2E Asia in Macao back in May, the iGaming Super Show in Amsterdam in July, SiGMA iGaming Malta in September and we’re getting ready to pack our bags for Malta again.
A new market opportunity is born in the USA
It’s great to go to a gaming industry event where the halls aren’t just buzzing with high energy and heaps of new ideas, but where there’s also a very BIG ISSUE hanging in the air, sitting right at the front of everybody’s mind.
This year in Las Vegas, the self-proclaimed ‘Entertainment Capital of the World’, one of the prominent discussion themes had a very USA focus to it: after 25 years out in the cold, sports betting is back in. The online environment will be its new natural home. What a market; what an opportunity; what a defining moment.
Sportsbook will be a huge opportunity for existing sports betting operators outside the US if they can find the right way into the market and put the right sorts of partnerships in place.
I predict there will be something of a gold rush, depending on how the state-by-state legislation unfolds. There will also be a lot of mutual dependencies; companies having to work together to get to the finish line ahead of the competition.
The mutual dependency works like this…current online gaming operators (the casino world) do not necessarily possess the skills for sports betting; gaming and sports betting might be of the same genus but when you get right down to the details, they are very different species. Current operators in the US are not likely, without deep pockets and instantly upscalable resource, talent, and experience, to swing entire new operations into place, serving a new market and new customers as soon as they are able to bet online.
Organisations will need to set out their stalls as soon as laws and licenses permit in order to gain the prime mover advantage. Meanwhile, existing online sportsbook operators from outside the US, from Asia and Europe, are gathering their forces at the border; they come with the know-how and the systems, but neither the necessary licenses nor the on-the-ground cultural knowledge. There is a tidy fit to be made there somewhere.
$145.5 billion market opens up as the Professional and Amateur Sports Protection Act (PASPA) comes to an end
PASPA has been in place for a quarter of a century (became law in January 1993). New Jersey, Nevada, Delaware, Mississippi (to a limited extent), Pennsylvania, and West Virginia have already offered online gambling licenses with launch dates imminent.
In its simplest form, the strategy that operators need to adopt follows three clear stages: Obtain the license, build the requisite IT infrastructure, start serving the market. It’s never that simple though; burgeoning legal procedures to jump through and a large chunk of change to pay for the license (Totally Gaming reports the cost of the initial licenses at $10 million) but the rewards will be there for the taking: USA Today says: “Despite PASPA’s existence, the American Gaming Association (AGA) estimates at least $150 billion a year is gambled on sports in the U.S. and 97% of that amount was bet illegally.” That amounts to a market in the approximate region of $145.5 billion.
Being first in to get most out
Measured against the potential business value of the opportunity perhaps the license fees are not onerous. What could be a sticking point, however, is getting the infrastructure in place for the online sportsbook services.
US operators will be looking for outside expertise from organisations born and bred into the online sports betting world. I was receiving the definite impression at G2E that there will be quite a few hands being shaken as Asian and European operators partner with US incumbents. A very interesting space to watch.
Outside operators coming in will need to have a firm grasp not just of cultures, customers and compliance issues, and the technology market ecosystem (best datacentres to align to and so on) but also how to manage the logistics involved with truly trans-global projects; becoming globally-dispersed operations and having to deal with the many complications thereby involved.
Viadex specialise in just that area, global IT supply, and logistics. Or, I should rather say, we specialise in every area of the world, running at almost 1,000 global projects a year. our logistics team and our in-country networks of local logistics services, make everything smooth; from documentation to customs clearances, duties and taxes and import/export procedures. More than that, however, we design and configure equipment in the UK and ensure it meets customer system requirements. If you’re going to America, be sure to give us a call to talk about reducing risk, accelerating market penetration, and being amongst the very first to cross the finish line. That $145.5 billion needs a new home, and we can help you build it.
If you’d like to get in touch about a project, or just want to ask for some advice, we’re always happy to talk. Email us at email@example.com