The expression ‘time flies’ is an appropriate framing to understanding the explosive growth in legalised sports gambling across the United States since the repeal of the Professional and Amateur Sports Protection Act (PASPA) in May of 2018. Various industry tracking agencies estimate that Americans have wagered more than $125 billion since the decision, with two-thirds of states having legalised some form of sports gambling. While many a news outlet has reported this incredible momentum, what has been less discussed is the presence of foreign companies driving the American evolution of sports gambling.
What dawned on us recently through a class assignment with our graduate students from our Ohio University’s College of Business dual MBA/MSA programme was the amount of learning and market developments abroad that could inform our country’s management and oversight for the betterment of intended audiences and future sports gambling consumers. Specifically, various regulatory efforts abroad aimed at the marketing and promotion of sports gambling in the hope of lessening a wave of new and younger problem gamblers. With that backdrop I turned to one of our current graduate students from Canada, as well as an alumnus from New Zealand with extensive executive experience in the Australasian sports gambling markets.
To begin, on June 23, 2021, the Canadian government passed the Safe and Regulated Sports Betting Act (C-218) that legalised single-game and online wagering for the first time in the country’s history. After this initial announcement, bill C-218 went live on August 27, 2021, when provincial governments could then decide if their province would adopt this new bill or stay the course of previous years. Seven of the 13 provinces and territories initially jumped on board, legalising single-game wagering, with Ontario leading the charge. Ontario is Canada’s most populous province, and upon implementing bill C-218, was the first to launch mobile wagering in April of 2022, with theScore’s mobile platform leading the way. As a result, MGM, FanDuel, Bet365, and other large players are now operating across Ontario, in the hope that additional provinces will join soon.
Ultimately, the goal of passing this bill was to allow the government to be able to regulate sports betting. Illegal books, run both through the US and Europe, were extremely prevalent across Canada, as it was estimated that Canadians were spending north of $10 billion per year through unregulated sites. This new legislation not only helps to ensure the safety of individuals partaking, but also enables that money to come back into the Canadian economy. As mentioned, Canada is a large market for sports gambling, a market that had been taken advantage of by ‘organised crime’ through illegal wagering methods throughout history. To quote Brian Egger of Bloomberg Intelligence, “Canada is playing catchup, today’s legislature is just smart, so that the Canadian marketplace can be governed by Canadians.” Generally, it will be quite interesting to see how provincial governments navigate this new space as the law matures, and what additional measures will be enacted to provide both success and safety across the country in the sports gambling space.
To continue with the international discussion, sports betting has been legal in New Zealand since 1996, and former TAB NZ Executive Chair/CE Dean McKenzie, who is now based in Southern California, has some interesting insights quoted below.
“In my view, there are really three key influencing factors to consider when examining the issue. Firstly, the regulatory framework operating in that jurisdiction; secondly, the cultural or social acceptance of sports gambling there (or gambling in general really); and thirdly, the commercial realities the sports book operator faces in optimising the returns for its shareholders.
“As a result, when considering the marketing and promotion of its products, the operator will obviously want to operate within the boundaries of that regulatory framework but just as important will be the social licence aspects of that. In my experience, these will differ from one territory to another. Whatever the regulatory framework, which will also likely differ from state to state, what may be socially acceptable in one state may not be acceptable in another. Don’t underestimate the importance of having a strong social licence, it’s critical in my view. Finding the ‘Goldilocks’ spot where regulatory compliance is achieved, harm is minimised, and returns are optimised is clearly the goal. However, at times this can be difficult to achieve and of course not every operator will have the same view on where that spot is.
“When it comes to my personal thoughts, I believe any legitimate, responsible sports book operator, with a long-term vision for the industry and their business, wants to minimise the harm that may come from its products. Harm minimization will sit at the very centre of what they will do every day. In my view, without a strong social licence, they just won’t be able to optimise their organisations value and long-term performance.
“Furthermore, you will find these best-in-class operators will have strong messaging in all marketing and promotions they undertake, regardless of regulatory requirements. They will also have robust harm minimisation tools available for their customers, together with well-resourced back of house infrastructure to support these. This is obviously one of the great advantages of sports betting being legalised here in the US; these tools and resources become part of the social licence to operate at a minimum and are available to all customers, something which is not always true in the alternative unregulated model.
“Finally, the regulatory framework in Australia in particular has certainly evolved over the years with regards to the marketing and promotion of sports betting. For example, specific restrictions in and around live sporting events are now in place, something which was not the case in the early days, and I would suspect the same sort of general evolution to occur, at varying degrees, throughout the US as the market matures more.”
The sports betting industry is facing large expectations, and as more states and countries come on board, the different processes set in place to help with its regulation will continue to be a point of emphasis. We are all eager to see its development in the near future.
This article is part of the 2022 SportBusiness Postgraduate Rankings. To browse the entire report and view the overall tables, click here.