September 2012

Several US businesses are used to operating in tightly regulated environments across multiple states. The standards of regulation and control of the gambling industry in states such as Nevada, New Jersey and others are amongst some of the highest and strictest in the world. US gambling businesses (and machine producers) licensed and operating within these regulatory frameworks have had to evolve to make their businesses profitbale while being tightly controlled and licensed under different state rules.

That is pretty much the scenario that has evolved in Europe in respect of remote gaming: multiple states, multiple regulatory and licensing systems. It is the position that applies in respect of states such as France, Italy, Spain and Denmark. Although it is also still possible to take business across some European states legitimately on the basis of a licence obtained in another European state such as Malta, operators are nonethelss required to cope with and manage multiple European licenses.

We consider that several US businesses, already used to operating in a similar way under tight controls across multiple states should have a clear operational advantage in terms of knowledge and capacity to turn a profit out of this type of business model.

Europe should be a good test case ahead of a wide scale opening of the US market. It is possible to obtain licenses in Europe and operate as of today, whereas widescale online operations in the US may not be available for some time.  Certainly the US is the “big prize” but the European Union alone has a population of over 500 million people and a growing remote gambling market which H2 Gambling Capital estimated would amount to around EUR 11bn in gross gambling revenue this year.

We also consider that the time is still ripe for strategic partnerships to be struck up between US and European gambling businesses which can bring complementary skills and assets to the table.  It is known that several European operators, platform providers and affiliates are seeking to prepare themselves to profit from a prospective opening of the US remote gambling market on a wider scale.

We consider that there could be some excellent cross fertilisation of knowledge and that this may represent an opportunity for US businesses to establish a foothold in Europe. This applies to business with global aspirations but it should also certainly apply to business which wish to rely primarily or solely on one or more social media plaforms, or those with a niche market and indiscriminately to operators, developers and content owners or rights holders.

Authors:

Olga Finkel(olga.finkel@whpartners.eu)

James Scicluna(james.scicluna@whpartners.eu)

First published in:

EGR North America, Issue 06

Link: http://www.egrnorthamerica.com/