Justin Stempeck, Chief Strategy Officer at Compliable
Since the beginning of the year, four US states have legalized (but not launched) online sports betting, taking the total number to 26, with six states also allowing online casino. Since the repeal of PASPA in 2018, we have seen rapid growth of the market with no signs of the expansion slowing down. Several states are expecting to open in the near future, with Kansas just recently launching, Massachusetts actively drafting regulations, Maryland positioning itself for a late 2022 launch and Ohio a fast follow in January 2023. California, one of the largest states in the US, is going to the polls on November 8th to consider two competing sports betting measures, a vote closely watched by all industry stakeholders.
The US market presents lucrative opportunities for operators around the globe, but it also offers other sectors of the ecosystem the possibility to profit from this exciting development, including global marketing affiliates.
As many will have already discovered by now, keeping track of the different rules, regulations and licensing requirements of each US state is a daunting task, and many affiliates may not have the resources or expertise in this space that established operators have, as few European countries have implemented regulation of this scale for the sector.
At Compliable, we provide a licensing platform for all gaming entities, including affiliates, to navigate through the complex regulatory landscape in the US as more states allow online gambling. From our experience and through conversations with affiliates, there are a few common questions and concerns about entering the US and there are several steps companies can take to simplify the process and ensure speed to market.
For a marketing affiliate that originates from outside the US, it is important to know that, prior to obtaining a vendor license to operate in most US states, regulators generally require that the business register with a state office (typically the Secretary of State). With this process handled by a non-gaming agency, it will delay your vendor license application if it is not in place before you submit your application with the gaming regulators, so it is crucial to give yourself enough time to avoid unnecessary delays.
Not every state requires affiliates to hold a license, however, and definitions can differ. It is crucial to do the research to determine what license type is needed, if any, as the application process is time consuming and involves significant paperwork. Once you have established that you need a license and you are ready to start the process, it is beneficial to carefully read through all the questions and fully understand what documents you will need before starting, as this will allow for a much more streamlined application.
Do not rush the through the forms and review them for accuracy and completeness, as common mistakes or simply failing to answer a question can lead to an application being rejected. Regulators do not want to spend time on incomplete applications, and they will be returned if not completed fully, delaying the time it will take for the business to get up and running.
Finally, an existing business partnership with an operator can significantly boost your chances of obtaining a license. Most regulators ask about this, as they only want to consider license applications of companies that already have existing relationships – it highlights the readiness and commitment to operating a serious business in the state. Locate your contract with your betting partner and be prepared to attach it as an exhibit to any licensing application.
The US licensing landscape can be a minefield but the opportunities for operators and vendors in the country are great. With thorough research and planning, the process to getting licensed and getting your business fully operating can become easier and more streamlined.
As more states consider regulating online betting and gaming over the next few years, it is an extremely exciting time to place a wager on the US market.
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