States legalizing online sports betting should be aware of economic and safety restrictions
WASHINGTON – January 9, 2020 – iDEA Growth released new research today, “In-Person Registration For Online Sports Betting. A Quantitative And Qualitative Analysis” demonstrating that in-person registration restricts the revenue potential of legal online sports betting, the competitiveness of legal markets, and the tax revenue that flows to state governments. Further, in-person registration makes it easier for players to stay on illegal sites and not convert to legal play.
“We do everything on our cell phones. Legalized, regulated betting and gaming should be no different,” said Jeff Ifrah, founder of iDEA Growth. “We don’t have to register in person for rideshare, dating, or food delivery apps, so why should mobile betting and gaming be any different?”
“Convenience and security are key to any form of online entertainment,” added Jeremy P. Kleiman, co-founder of iDEA Growth. “Today’s technology can provide both a secure and reliable online registration process, as well as an efficient and convenient user experience. There is no compelling reason to require in-person registration.”
The research, commissioned by iDEA Growth and conducted by Eilers and Krejcik Gaming, analyzed in-person registration requirements for online sports betting accounts. In this approach, consumers are required to show up at a retail facility — generally a casino or racetrack — to register or activate their online sports betting account. After completing the in-person registration, consumers are free to place bets using their online betting account from anywhere within the state.
The conclusions from the research is that in-person registration is likely to significantly restrict the revenue potential of legal online sports betting, the competitiveness of legal markets, and the tax revenue that flows to state governments. Based on this research, it is recommended that policymakers carefully weigh these harms against any perceived benefits of an in-person registration requirement for online sports betting.
- Convenience has been core to success in first-wave sports betting markets.
- Many consumers found in-person registration to be inconvenient at best and prohibitive at worst.
- Consumers both want and support remote registration.
- In-person registration requirements risk increasing demand for illegal sports betting.
- In-person registration requirements decrease competition.
- In-person registration is not standard in comparable markets or with comparable products.
The analysis is based on a proprietary survey of sports bettors in Iowa, the largest active market to require in-person registration, as well as findings from a variety of other consumer surveys, and a survey of comparable domestic and international sports betting markets. To view and download the full research report, visit https://ideagrowth.org/impact-of-in-person-registration/.
iDEA Growth (iDevelopment and Economic Association) is a 501(c)(6) association which seeks to grow jobs and expand the online interactive gaming business in the United States through advocacy and education. We represent all sectors involved in the growing industry of internet gaming and entertainment, including operations, development, technology, marketing, payment processing, and law.