Online Sports Betting Offers Growth Market for Tech and Data Firms
With sports betting now legal in some states and on its way in others, casinos and gaming operators are not the only companies poised to benefit from this promising market. Legalized sports betting offers huge opportunities for the technology and data sectors, as gaming entities seek to comply with government regulations and consumer concerns. As the demand for online gaming grows, operators are looking for platforms adept at handling such functions as geo-location and age verification protections, and consumers want reliable data to review while placing bets.
Antonios Kerastaris, Group CEO of gaming solution supplier Intralot, recently estimated that online sports betting could be 40-45% of the marketplace; in the UK, 70% of sports betting occurs online and through mobile devices. However, as our graphic illustrates, online sports betting is not legal in every U.S. state. Operators must use technology to ensure they are only offering games within state borders. To avoid possible violations of state and federal law such as the Wire Act, operators offering online or mobile sports betting must ensure that their services comply with the regulations of the states where the bets are placed and are not offered across state lines in jurisdictions with differing or opposing regulations.
The need to meet these requirements has inspired innovative development and partnerships. Canada-based consumer verification firm GeoComply this month announced that it has teamed with iDEA member SBTech to complete the integration of its New Jersey approved geolocation compliance solution with SBTech’s iGaming & Sports betting platforms, and that its geolocation technology will now be available for use alongside SBTech’s products across its on-property, online and mobile channels as they expand their offerings in the US., SBTech also recently partnered with Golden Nugget Casinos in Biloxi, MS and Atlantic City, NJ, Churchill Downs Incorporated and Resorts Casino Hotel to provide a full platform and sportsbook solutions to meet state licensing requirements.
SBTech CEO Richard Carter noted: “As legalized sports betting becomes more widespread across the country, by partnering with GeoComply, we’re able to meet each state’s specific geolocation requirements, whether for on-property, online or mobile applications.” iDEA’s own proprietary research shows that geographic fencing has been implemented with success in New Jersey, a state with densely-populated borders.
Another service, Trulioo, uses technology to differentiate from browsers in different European countries; now it will apply that same algorithm to differentiate browsers in all 50 states. Its technology takes a user’s mobile phone number and matches it with carrier data to verify age, address and other identifying details in “real-time.” Properly-applied geolocation protects operators by avoiding money-laundering risks as well.
Data too has become increasingly valuable, especially as a component to in-game or live betting. Venture capital firms are noticing: on July 30, private equity firm Apax Partners LLP agreed to acquire Genius Sports, the data and technology company with ties to a number of global gambling houses and sporting bodies, including Major League Baseball and English Premier League soccer. The Canada Pension Plan Investment Board and the private equity firm TCV bought a minority stake in Sportradar AG, another sports data analysis firm, valued at $2.4 billion. Pennsylvania venture capital firm SeventySix Capital has invested in Vegas Stats & Information Network, a sports betting media network providing news, analysis, and proprietary data.
As online gaming produces revenues for state governments through taxes, it also promises profits to companies which can ensure the reliability of the experience.