Sports Betting Operator Issue 10

If you are among the very few people in the world who doesn’t know who Shohei Ohtani is, you do now. The former star of the Nippon Ham Fighters and Los Angeles Angels baseball teams, now a Los Angeles Dodger, is the biggest name in MLB, and at the center of a major sports-betting scandal.

According to U.S. federal authorities, Ohtani’s interpreter, Ippei Mizuhara, stole $16 million from the superstar and funneled it to illegal bookies. Blessed with stupidity as well as avarice, Mizuhara proceeded to lose over $182 million on 19,000-plus sports wagers. Small wonder that the judge in his case has ordered him to undergo treatment for compulsive gambling.

Although the case at hand centers on illegal bookmaking, it may yet have legs that take it to Las Vegas. That’s where Mizuhara’s bookie was in the habit of spending his winnings at various MGMbranded casinos, as well as Resorts World Las Vegas. For a casino industry still reeling from the Scott Sibella money-laundering scandal this qualifies as Very Bad News.

It also highlights the dangers of allowing illegal sports betting to continue to be the law of the land in California and other states. Sunlight is always the best disinfectant for unlawful activity but the Venetian blinds remain closed in the Golden State. Betting activity the magnitude of Mizuhara’s is simply harder to detect when it’s done on the sly, as veteran, frustrated regulators like New Jersey’s David Rebuck would be quick to tell you.

Although Ohtani has been cleared of misdeeds by the feds, the NBA’s Jontay Porter is not so fortunate. The betting activity of this Toronto Raptors player is under intense scrutiny after suspicious (if otherwise legitimate) prop bets were detected on his potential stats in upcoming games. The wagers took the

RIGHT: David McKee, Editor in Chief, Sports Betting Operator

“under” on the benchwarmer’s activity — or lack thereof.

In this case where there’s smoke there seems to be a certain amount of conflagration. NBA Commissioner Adam Silver has already threatened to ban Porter for life if any wrongdoing is uncovered.

Throw in the mounting backlash against the unceasing saturation of advertising for legal sports betting and you have the makings of a perfect storm for sports betting in the Land of the Free. It doesn’t help that news story after story reports that calls to problem-gambling hotlines are rising in corresponding volume to the increasing presence of sports betting in the states.

Newspaper editorial boards (up to and including the Washington Post) and opportunistic politicians are calling for renewed federal regulation of sports wagering and how it is marketed. Which would bring us back to the censorious days of the Bradley Act.

It’s an open question at best whether or not OSB providers are doing all they can to discourage problem gamblers. FanDuel was recently found not walking the walk. DraftKings CEO Jason Robins thinks it a brilliant idea to blame the victims. “It’s not this black-and-white line,” he whined. “There’s some onus on the individual in this, too … It has to be on them to decide that they want to change this behavior.”

With friends like Robins, who needs enemies?

MAKING THE VIRTUAL A REALITY

Ian Freeman lays out the vision of Inspired Entertainment.

Aseasoned industry veteran with more than two decades of experience in sports and iGaming, Ian Freeman has held leadership positions with two companies in global gaming and technology. To these he now adds chief commercial officer for virtual sports at Inspired Entertainment. He accepted the post last November.

Before joining Inspired, Freeman served as chief revenue officer for FSBTech, where successful launches in Ontario and South Africa demonstrated a focus on driving customer acquisition and retention, and revenue growth, as well as global market expansion. Freeman was previously at International Game Technology, where he played an instrumental part in the rollout of IGT

By Peter White

PlaySports across North America. His impressive career also includes five years at Kambi, where he served as chief commercial officer and was a member of the management team that navigated the company’s successful IPO and gained a foothold in UK and Colombian markets. Following ICE London, Freeman sat down with Sport Betting Operator’s Peter White. Their conversation has been edited for clarity.

What aspects of the role of chief commercial officer for virtual sports at Inspired Entertainment appealed to you most and why?

What I love about the virtual sports business is the opportunity to further develop the category across multiple territories and segments, which helps operators drive incremental revenues

at a stable margin. The most powerful appeal lay in Inspired’s unrivaled expertise in the global virtual sports market. No supplier in the world can match their portfolio of titles or range of sports and eSports — from licensed American football, basketball, and baseball to eSports offerings, both men’s and women’s soccer, tennis, golf, horse and greyhound racing, motor racing, and even marbles. Inspired’s diverse catalogue caters to both seasoned bettors and novice players alike.

Since coming to Inspired, I’ve found that the company’s emphasis on teamwork, talent, and cutting-edge technology creates an environment of innovation and creativity. The design process remains flexible, prioritizing the creation of games that resonate with players’ desires. Development and delivery are collaborative, with a team of individuals who have both creative flair. and sharp mathematical acumen — including our esteemed, BAFTA award-winning, virtual sports design team, renowned for their meticulous attention to detail in crafting lifelike player experiences.

Beyond that, the company’s commitment to employee well-being, professional development, and social integration aligns with my own values and priorities. Inspired is genuinely focused on supporting and nurturing its team members. The opportunity to contribute to the success of Inspired’s virtual sports division in such a dynamic and supportive environment excites me on a daily basis.

Tell us about the new partnership with Luckia to deliver your virtual products to the Spanish market?

Inspired has developed longstanding partnerships across Europe, particularly in Greece and Italy, and European players are familiar with our

products and virtual sports. Our new and exciting partnership with Luckia spearheads the introduction of virtual sports in Spain. Luckia customers now have access to a dynamic range of Inspired’s cutting-edge games, including soccer, basketball, and marbles, as well as horse and greyhound racing, with further product launches expected over the next few years.

Inspired Gaming also recently announced the launch of its newest virtual sports soccer product, V-Play Torneo™ (also known as V-Play Knockout Cup™). What are its main features and what are your target markets for this game?

V-Play Torneo™ (the Italian name of the game) or V-Play Knockout Cup™ (its UK name) features eight teams competing in a tournament. The event screen displays the highlights of the quarter-final, semi-final and final games. Players can follow the progress of the tournament from the scoreboard and any goals scored are updated in real time. The game is presented as a single-event format and the event will last up to two minutes. Bets are offered on a number of markets, including tournament winner, second place, straight forecast, reverse forecast and total goals scored.

As its name suggests, V-Play Torneo™ was first launched in Italy. It caters to football enthusiasts with versions available in both Italian and English. The thrilling gameplay aims to captivate audiences across Italy, delivering an unmatched virtual football experience.

How important is continual investment in research and development?

This year a major goal for the team is product/market fit. We have an exceptional, best-in-class product,

and one of the best development and graphics team in the industry.

Investment into research and development is vital for long-term growth and competitiveness. It allows us to continue to be innovative, develop new products, improve existing ones, and find out exactly what our customers want and need. In industries like gaming, innovation is key to attracting and retaining customers. Continual investment into research and development allows us to create cutting-edge games that appeal to consumers, and differentiate them from our competitors.

To achieve this, we consistently ensure we use the latest technology to constantly help to improve our graphics. We invest in large motioncapture spaces, new, faster ways to render, and we build on years of our artists’ experiences and expertise to ensure continual improvement. Every product has to be better than the last. We place high value on efficiency improvements, development pipelines,and maintaining high uptime.

We are also looking at how AI can help us improve and enhance our offerings across all areas of the virtual business including development, quality assurance and graphics. The aim is to determine whether AI text-to-speech can generate realistic commentary for our virtual events. AI speech could be hugely beneficial to us, as it enables us to provide a variety of voices, and a huge selection of languages within a significantly easier and shorter timescale. This will in turn greatly benefit both our partners and players.

How was ICE London for

Inspired Entertainmentand what are the other main shows where readers can expect to find Inspired Gaming this year? ICE 2024 was a resounding success.

One big highlight was showcasing our branded basketball product. Inspired secured the rights to develop virtual sports games based on the league’s archived footage. Fans will be able to wager on teams in fast-paced matchups, that include all 30 team logos, as well as archived footage from notable basketball games.

This month, we are excited to attend the Brazilian iGaming Summit as we continue to explore opportunities for growth across South America and Latin America. Soccer is hugely popular in Brazil and continues to dominate the market. For that reason, we are currently configuring a bespoke Brazilian soccer product. It will feature Brazilian-themed teams, as well as stadia, where we aim to replicate the vibrant and energetic atmosphere seen at stadiums across Brazil into our product.

We also look forward to exhibiting at G2E later this year, particularly as we have captured the attention of a number of prominent Tier 1 operators entering the U.S. market for the first time. These operators are keen to add virtual sports to their lineups, which will in turn attract new customers and expand their revenue streams.

Tell us about your partnership with Kambi to provide virtual sports offerings and is the North American sports betting market your priority growth jurisdiction?

Through our agreement with Kambi Group, we will integrate Inspired virtual sports products into the Kambi sports book platform. This integration will allow Kambi’s partners to offer Inspired’s virtual sports line-up to its customer base, via a seamless sportsbetting-user journey whilst unlocking dynamic new, incremental revenue streams for all parties. Inspired won this partnership as Kambi’s exclusive

virtual sports provider through a rigorous, competitive, procurement process. North America is a core market, and we are seeing both operators and regulators acknowledge that virtual sports will satisfy a latent demand for off-season sports events. Of course, we always want progress to be faster but we are making great strides.

In 2024 we expect to be live with multiple operators across multiple states in the U.S. and in Ontario. It is testimony to the power of Inspired’s brand, and its graphic and technical product quality, that two of the world’s most iconic sports franchises agreed to partner with us on long-term licensing deals. These groundbreaking partnerships represent a significant stride in our journey toward redefining virtual sports and tuning into customers’ needs. Aligning with these iconic sports leagues gives Inspired access to exclusive data, branding assets, and intellectual property rights, enabling the creation of highly authentic and immersive experiences. By leveraging both leagues’ extensive resources and fan bases, we are poised to deliver unparalleled content that resonates with audiences worldwide. Additionally, partnerships with the MLBPAA and NFLA further solidify Inspired’s position as a trailblazer in the virtual sports arena. These collaborations let Inspired tap into the rich heritage and legacy of professional sports. By incorporating authentic team logos, player likenesses, and historical data, Inspired’s products stand out for their authenticity, and depth, captivating fans and enthusiasts alike.

Our venture into eSports represents a bold move towards diversification and innovation, as well as product development and deliverability. By integrating live tournament footage

from one of the most popular eSports titles, Inspired bridges the gap between traditional sports and eSports, catering to an ever-growing audience of gaming fanatics. This innovative approach not only expands Inspired’s market reach but also underscores our commitment to stay at the forefront of industry trends and consumer preferences.

Inspired is the only supplier to offer licensed American football, basketball, baseball and eSports virtual games. This is an integral part of our strategy to bring our branded portfolio of licensed, U.S.-centered sports to the North American player base, as well as to eSports enthusiasts across the globe. To further appeal to North American players, Inspired has launched its V-Play lottery portfolio, and is partnering with lottery operators including the Pennsylvania and D.C. lotteries.

Tell us about any new Virtual Sports launches in North America. We have had some exciting new launches in 2024 across North America. We recently launched End Zone Cash, which features NFL Alumni (NFLA) players and is available to

RIGHT: Ian Freeman CCO

play through the Pennsylvania Lottery in more than 10,000 retail locations throughout the state. End Zone Cash brings favorite, retired football legends back to the field, features 16 teams with eight matchups and is available seven days a week, every four minutes. As well as featuring recognized players, End Zone Cash displays team matchups, a touchdown count and a touchdown multiplier. End Zone Cash will be launched across the Pennsylvania Lottery’s entire retail estate and will be shown on monitors in more than 2,000 retailers.

We also recently launched Virtual Sports content in New Jersey through a partnership with Rush Street Interactive (NYSE: RSI), a leading, online, sports betting and casino company in the United States. Our content is now accessible to BetRivers players through its renowned BetRivers sports book and casino. This launch is the first of many planned across other states with RSI in the coming year.

Over the next few months, we have launches planned with bet365 in New Jersey and Ontario, as well as BetMGM in Ontario, with more launches expected throughout the year.

Can you provide readers a sneak preview into what new products and game updates they can expect from Inspired Entertainment this year?

Inspired has recently introduced its initial, branded, American football and

baseball games, anticipating a total of four branded American football games. Our second branded American football game and our first branded basketball game will launch in 2024. We are also preparing for the release of our eagerly anticipated eSports title later this year. As well as this, we are excited to share that we are in the early development stages of a new ice hockey product, which will be aimed at North American players, as well as ice hockey enthusiasts around the globe.

What are among the long-term ambitions for Inspired Entertainment?

The company and virtual sports industry as a whole are constantly evolving and shifting, in line with the latest technological advances. We are laser-focused on distribution and product market fit, optimizing the virtual sports experience for our operators and their customers, and opening up new product categories. It is a very exciting time. I feel fortunate and privileged to be working with such a strong and inclusive leadership team, and an amazing group of talented and humble people in our virtuals business unit. I look forward to continuing this work with my Inspired colleagues, developing new and game-changing products (particularly those aimed at North American and Brazilian players), as we pursue commercial strategies, and collaborate with key partners and Tier 1 operators to increase incremental revenue. This will include conducing thorough market analysis, identifying growth opportunities, fostering collaboration, and setting strategic priorities to further drive revenue and market share.

HOW TO SUCCEED IN AFFILIATE MARKETING: PROVEN STRATEGIES FROM 1XBET

The global betting company 1xBet explains how Internet entrepreneurs can multiply their income by redirecting traffic to its gaming platform

The Internet’s rapid development and widespread availability have created ideal conditions for affiliate marketing. These allow you to increase your audience reach and achieve financial success. Working with a large, successful brand helps to develop almost any media project generate additional income and confidently look into the future.

Introduction to affiliate marketing

The bookmaker company 1xBet is interested in increasing the number of registered clients, the volume of their bets, new markets and promoting its brand. To do this, we need the help of popular news sites, blogs, YouTube channels, social media pages, or instant messenger group owners, who will boost traffic to the gaming

platform due to the popularity of their resources.

In other words, you need to convince your audience to register on the bookmaker’s website or app and place bets on sports or casino games. How does it benefit you? For each referred player, you will receive a fixed income or commission and your total earnings are not limited.

Decide on a payment plan

To succeed in affiliate marketing, program participants use various strategies, but at the initial stage you need to decide which payment model is more profitable for you:

CPA (Cost Per Action): involves paying a partner for registering a new player or making deposits.

RevShare (Revenue Share): provides lifetime commissions calculated from the revenue generated by the bookmaker.

Hybrid: combines a flat fee for a new active player with lifetime commissions on the bookmaker’s profits.

The lifetime commission for each referred player can reach 40 percent. Each model has its advantages, but different regions have specific laws and tax policies, so don’t make a hasty decision.

Affiliate marketing benefits in betting

Affiliate marketing is a powerful tool for a sports betting business and has clear benefits for the affiliate.

Access to the international market

Sports have no boundaries and people worldwide love to bet on them. A banner announcing the Manchester

City versus Real Madrid Champions League match will attract huge attention from a broad audience, not only to the betting site but also to your own resources. Take the chance to advertise the world’s best sports brands, magnets for sports fans and betting enthusiasts.

Brand recognition

You can implement individual advertising strategies and experiment with content while protecting yourself against failure. Working as part of a big and successful brand team, 1xBet ensures you will always have a large target audience.

Minimal risks

1xPartners members risk nothing and pay no money to join the program. You can place links on any resources – it is not necessary to focus only on those media dedicated to sports or gambling. In the worst case, the partner will not receive additional income – direct financial losses are out of the question.

Benefits of betting on 1xBet

1xBet clients can bet on thousands of events in various sports daily, and all new players are offered a welcome bonus for sports betting or playing in the Casino section. 1xBet has an impeccable reputation and is the official partner of FC Barcelona, Paris Saint-Germain, LOSC Lille, La Liga, Serie A, and other world-famous sports brands and organizations. Every day, over three million people visit the company’s website and app, and receive high-quality service, a guarantee of fast payments, and their personal data security.

How to become an affiliate program member

The first step to success is creating an

account. Go to the 1xPartners page, click the Registration button and fill out the required fields. A company representative will review your application and respond within 48 hours. After approval, the newcomer can create referral links to promote the gaming platform.

High Rates. 1xPartners offers various collaboration models, including RevShare up to 40 percent, CPA and a hybrid model. This flexibility allows partners to choose the best terms that suit their goals and strategies.

Automatic Payouts. Once a week, money is automatically transferred to partners’ accounts. Over 250 popular payment systems, online services, electronic wallets and cryptocurrencies are available for fund withdrawals.

Lifetime Income. 1xPartners members receive lifetime commissions from the invited players’ bets, which guarantees a stable income in the long term.

Diverse Options for Players. As part of the collaboration with 1xPartners, affiliates can offer their audience a broad selection of betting and gambling games, including sports, esports, casino, live casino and slots. Promos, bonuses, and competitions with prizes, which are regularly held on the 1xBet platform, help to attract new players and increase the partners’ earnings.

Global Reach. The 1xPartners platform brings stable income to partners operating all around the world.

Promotional Materials. For effective work, the company provides access

to a library of high-quality advertising materials and other useful resources. Ready-made banners and text ads that can be placed on social media help to draw visitors’ attention and direct them to 1xBet.

Detailed Reporting. 1xPartners presents online statistics and detailed reports so that partners can track their performance, analyze data, and have revenue growth.

Smart Links and Traffic Tracking. Smart Links improve personalization and better match each user’s needs. Affiliates can also easily track traffic and optimize their campaigns to increase conversions.

Integration Tools. Postbacks greatly simplify the process of monitoring and further improving affiliate marketing. Advanced tools allow you to track user activity more accurately, providing deeper analysis and the ability to make changes to improve results.

Affiliate marketing is a dynamic and multifaceted business model that offers the shortest path to success in a competitive market. It is a completely legal type of income, and more than 100,000 partners worldwide have already chosen it. Using 1xPartners as an example, we proved that you can make money even in countries with limited betting activities. Join the 1xPartners and increase your earnings with the help of available media resources!

ALWAYS GROWING

Interview with Naomi Barton, portfolio director responsible for iGB Affiliate and iGB L!VE

Clarion Events scored a massive success with the most recent ICE London and is now shaping a course for the 2025 expo in Barcelona. To learn the secrets of Clarion’s success, Publisher Peter White sat down with Portfolio Director Naomi Barton.

Could you please tell us about yourself, and your background and experience in the conference and events industry?

I have been part of the Clarion team since 2019 and have worked in the events industry for more than 25 years in sectors as diverse as retail, design, hospitality and gaming. As well as the UK I’ve worked out of Dubai and Qatar managing international teams of event professionals. I’ve run large-scale events in Dubai, Saudi Arabia, Spain the Netherlands and of course the UK.

What aspects of the affiliate gaming family do you enjoy most?

Every sector that I’ve worked in has its own unique set of characteristics and personality traits. The affiliate gaming family as you refer to it is dominated by entrepreneurs. They are ambitious, they have a sense of purpose and they are what I would describe as doers. I regard working in this environment, and alongside such infectious and charismatic personalities to be a privilege.

From a conference- and event-hosting standpoint, what are amongst your key priorities for your delegates, sponsors and exhibitors?

I think in broad terms there are two types of business-to-business expo. There are those that provide an opportunity for stakeholders to reflect on the past and reminisce about the

‘good old days,’ and there are those ambitious events which constantly look to the future, and are always asking, why not as opposed to why. Both iGB Affiliate and iGB L!VE have built reputations for being melting pots for new ideas, new thinking, new trends, and for delivering new-to-show tech vendors, and of course, new business opportunities.

The research that we conduct among our stakeholders consistently underlines the importance they place on staying on top of the latest industry trends, networking with potential new partners and clients, gaining insights into emerging technologies, and receiving a diversity of perspectives and experiences from throughout the world. Our ability to consistently meet these core-customer requirements explains the strength of the iGB brand. For example, February’s edition of iGB Affiliate, the last to take place in London ahead of the January 2025 move to Barcelona, rewrote the record books attracting more attendees than at any time in the event’s history. The figure of 7,295 unique visitors was 27 percent up on 2023 and represented the fourth consecutive year of doubledigit growth. All of the key performance indicators that we apply came out in positive territory, with the number of exhibitors and sponsors totalling 250 (up 11 percent year-on-year) occupying a total of 13,647 square meters of space (up 16 percent year-on-year).

We are also recording our best-ever satisfaction ratings and re-bookings for the first iGB Affiliate in Barcelona are off the scale. So, to answer your question, the ability to always deliver ‘new’ sits at the very top of the agenda.

How are you and your team gearing up for this year’s iGB Live, and what plans and aspirations are in the mix over the four days of exhibition from the 16th to

19th of July.

We are in a perpetual state of planning and preparing for what will be the last edition of iGB L!VE to take place in Amsterdam. The show’s relocation to London in 2025 is all-consuming. The plan is to deliver another recordbreaking edition of iGB L!VE, which in 2023 recorded a 44 percent boost in attendance, and to bid farewell to Amsterdam in style. The iGB L!VE fiveyear plan targets over 35,000 visitors and 550-plus exhibitors and sponsors. To achieve those targets we need to first secure another record-breaking edition of iGB L!VE in July and take that momentum forward in a city which is recognized as being the home of igaming.

What have been the key milestones achieved so far with iGB Affiliate?

As the show has grown in size and scale there has been several milestones which I think track some of the changes in the sector itself

Covid had a big impact on the industry and the show. Seeing how the industry rallied together gave us a new understanding of the community-based nature of the industry and the role that we play in providing a home for that community.

Last year saw impressive growth both in terms of exhibitor and attendee numbers, and whilst our goals are

RIGHT: Naomi Barton, Portfolio Director responsible for iGB Affiliate and iGB L!VE

focused on quality not just quantity, breaking 5,500 attendees was a key milestone, as was exceeding 7,200 attendees in February.

Looking ahead, the next big milestone will be the move to Barcelona, which marks a whole new chapter in our history and one which will deliver a host of new opportunities for all of our stakeholders.

What’s one unexpected shift you’ve seen in delegate expectations or demands in the last two years?

I don’t think its necessarily an unexpected shift but the whole sector is professionalizing as it matures and as gaming becomes more serious about affiliation.

Entrepreneurs have successfully grown and developed their businesses into PLC-traded companies and these organizations are having an impact on the gaming industry.

As a result of this we have seen growth in the number of C-level attendees at the show, and they naturally have different needs and expectations based on their business goals.

Across the board we hold ourselves to a high and professional standard of execution, at a time when a lot of other affiliate shows are scaling back their presentation standards.

For us it’s important to ensure that all aspects of the event experience are considered. Of course, the fundamental objective is to get the

right affiliates together with the right affiliate programs and to drive growth. However, we also believe that in an industry which is about quality relationships, quality connections, and trusted insights, that the right professional and creative environment is an important factor.

How do you see the affiliate sector changing in the next five years and how do you see the iGB events evolving with that change?

If there is one thing that’s certain it is that this industry will continue to grow and evolve. With dynamic changes in legislation and technology it’s almost impossible to predict what those changes will be five years from now but change will always be a constant in this industry. I’m sure we will see new revenue streams opening up with new channels, such as we are seeing with streaming. The industry will continue to evolve and professionalize, and have a greater focus on sustainable play

We are also seeing a move towards larger affiliate networks, and this is already having an impact on the way the industry works and shapes the future. There will of course be new markets opening up as regulations take hold and we expect to see these processes speed up.

No commentary would be complete without mentioning AI or machine learning and the impact of this will totally revolutionize everything we know today. We will also keep an eye on new, immersive, digital experiences and their impact as we see a more seamless merging of physical and digital worlds.

One thing is for sure though, the level of innovation will continue to advance, and as we become more and more committed to sustainable gaming, we expect to see even more value coming into the channel.

ATRUE GRIT

An interview with Katherine Baker and Josh Kirschner of Nelson Mullins. By Damien Connelly

s March Madness continues, so does the Gambling Addiction, Recovery, Investment & Treatment Act, alongside the ongoing debate over federal sports betting excise taxes. Introduced back in January, the GRIT Act aims to tackle and investigate gambling addiction, with its funding drawn from the federal sportswagering excise tax.

Sports Betting Operator’s Damien Connelly sets out to find out the implications of this new law from legal firm Nelson Mullins’ Katherine Baker and Josh Kirschner.

Could you please tell us about yourself, and your background and experience in the sports betting industry?

Kirschner: We are both founding members of Nelson Mullins’ Gaming Industry Group. Katie, a partner in the Boston office of Nelson Mullins, serves as the group’s chair, and focuses her practice on helping commercial and tribal gaming operators and vendors navigate the state, commercial, and tribal gaming landscapes, with a unique expertise in leveraging fintechbased solutions for her clients. Katie also co-founded and leads the firm’s Women in FinTech (WinFin) affinity group.

Baker: Josh comes to Nelson Mullins after serving as general counsel for a large, sports gaming operator. He

ABOVE: Josh Kirschner

is currently a senior associate in the firm’s Atlanta office. He counsels a wide variety of gaming, gambling, and sector-adjacent operators, vendors and other individuals on navigating state, commercial, and tribal gamingregulatory regimes.

For those of our readers not fully appraised of the GRIT Act, could you provide a brief overview?

Baker: On January 11, 2024, Senator Richard Blumenthal and

Representative Andrea Salinas introduced the Gambling Addiction, Recovery, Investment & Treatment Act, commonly referred to as the “GRIT Act”), The act is the first of its kind in that it would create the first-ever federal funding source dedicated to addressing and studying gambling addiction. The programs and grants created by the GRIT Act would be fully funded by the federal sports-wagering excise taxes, and would not include an increase in taxes. The act would appropriate 50 percent of all revenue generated by the excise tax to fund state grants to “address gambling addiction” and National Institute on Drug Abuse grants to “support research on gambling addiction.” In the immediate term, passage of this bill would authorize spending for 10 years and require the Secretary of Health & Human Services to submit a report to Congress on the effectiveness of the funded programs.

This new, proposed legislation that has been introduced in both houses of Congress would establish the first dedicated stream of federal funding for gambling-addiction treatment, prevention and research. How it will affect major sports gaming operators?

ABOVE:

Katherine Baker

Kirschner: Although this bill does not create any new obligations for operators, it will likely have a range of impacts on them. As an initial matter, the dedicated state funding in the GRIT Act may spur increased legislation and regulation by states that have already legalized various forms of gambling. The GRIT Act’s creation of a new funding source for state-responsible, gaming-grant programs may cause states to revisit current sports wagering legislation and regulatory schemes to include new provisions related to the creation or expansion of such programs, to provide a hook for GRIT Act grant eligibility.

Baker: This would complicate matters for sports betting operators that have already implemented responsiblegaming mechanisms and safeguards designed to address existing state regulatory requirements, as well as potentially increase their compliance costs. Second, it will undoubtedly turn up the already bright spotlight placed on operators to answer whether legalized gambling is being sufficiently regulated via the current patchwork of state laws and regulations, as well as whether these operators are properly protecting consumers, and providing proper controls, guardrails, and resources around responsible play. Third, it may entrench and give new life to the more-than-70-yearold federal sports-wagering excise tax, which is the primary reason the American Gaming Association opposes the bill.

What can we expect that the Secretary of Health & Human Services will likely be reporting on to Congress?

Baker: The bill directs the Secretary of Health & Human Services to “report to the Congress on the effectiveness of the programs and activities carried out pursuant” to the Act. These programs are the Substance Abuse & Mental Health Services Administration (SAMSA) grants to states to address gambling addiction and the National Institute on Drug Abuse grants to support research on gambling addiction.

The GRIT Act is likely will extend beyond the current session of Congress, given an overall lack of movement on new legislation and the reality of a national election this year. So what best practices should operators be incorporating into their operations ahead of this new legislation?

Kirschner: At the top of the list of best practices is full compliance with current state laws and regulations related to responsible play, and consumer protection. Second, operators should be prepared for a raft of new responsible-play and problemgaming requirements, and a raising of the floor for what these requirements entail across the country. Operators should identify potential responsibleplay-related tools and regulations, and work together with policymakers to introduce these, rather than allowing the policymakers and regulators to dictate terms on their own. Lastly, operators would be wise to study

the UK Parliament Gambling White Paper and regulations imposed on EUcountry operators for a roadmap on where responsible-play regulation may be headed in the U.S.

What kind of responsible-gaming messaging should sports betting operators be putting out to their retail and online patrons?

Baker: As some of the leading online sports gaming operators have done with the new trade association, the Responsible Online Gaming Association (ROGA), operators should be reiterating their commitment to responsible gaming to the public. This issue is of the utmost importance to the continued success of the gaming industry and should be treated as a shared responsibility among all stakeholders.

How will this complicate the recent and continuing legalization and growth of sports betting across states?

Kirschner: The GRIT Act and the larger, national discussion around the perceived, increased social costs of legalized gambling have shone a bright light on the industry. We do not think this will add new opponents to the legalization of sports betting. Rather, this bill will likely give new ammunition to opponents seeking to stop the growth of sports betting across the country. The effect will be to increase the regulation of sports betting within those states that have already legalized sports betting, which will increase the compliance cost burden on operators.

LOOSEN THE RULES!

A new study highlights the benefits of liberal sports betting regulation.

Report provided by the International Betting Integrity Association

The recently published “The Availability of Sports Betting Products: An Economic and Integrity Analysis” study examines the comparative impact of restrictive and liberal market regulation of sports betting products on consumer protection, regulatory oversight, taxable revenue, marketing and sports integrity.

Prepared by H2 Gambling Capital, the leading authority regarding market data and intelligence on the gambling industry, the study is based on actual operator data, International Betting Integrity Association (IBIA) alert data and H2’s own market data.

The study forecasts that regulated global sports betting will be worth $94 billion in gross gambling revenue (GGR) in 2024, with 65 percent ($61 billion) generated via online bets. It is forecast to reach approximately $132 billion by 2028, with over 70 percent ($93 billion) online. Its analysis focuses on the core sports betting products –in-play, football, tennis and basketball betting – that drive that growth globally. It also assesses the market impact of the availability of those core sports betting products.

The central finding is that there is a strong correlation between the wide

availability of sports betting products and the proportion of consumers who place bets with onshore, regulated sports betting operators. This correlation is thereby reducing the risks of exposure to sports bettingrelated fraud on unlicensed markets.

It also highlights specific betting markets that have a disproportionate impact on the market and the onshore channelling rate due to their size and popularity. This includes football, which dominates sports betting globally, and tennis, which is particularly strong in Europe. Products like ‘in-play,’ ‘side markets’ (e.g. cards and corners) and ‘prop’ betting also have a very significant impact on channelling.

New data challenges the assumption that these markets represent a heightened risk of match-fixing-

operators. Basketball is particularly strong in North America but is also a prominent betting product in Europe and Asia.

FEATURE: IBIA

This report has therefore focused on the availability of in-play, football (soccer), tennis and basketball betting, notably online, which are the core sports betting products globally, in its analysis of product availability.

GLOBAL BETTING GROSS WIN BY SPORT ($ bn)

related that restricting their availability via regulated onshore operators significantly increases the number of consumers using riskier unlicensed offshore operators.

JURISDICTIONS IN THIS REPORT

The total betting gross win per market, sports (football (soccer), tennis, basketball), and per adult has been set out for comparison and analysis covering the 12 jurisdictions assessed in this report.

A blunt and counterproductive instrument

Khalid Ali, CEO IBIA: “Whilst politically attractive, the study confirms that bet restrictions are a blunt and counterproductive instrument. They don’t prevent betting, they just drive it into the unregulated market where most of the problems with sports integrity arise. The conclusions are clear: If you want to protect consumers and sports from corrupters, while maximizing tax revenues, then allowing a wide range of sports betting products is essential.”

Licensing is Fundamental to a Successful Market

The regulatory and licensing framework provides the foundation of any policy on the availability of betting, both land-based and online. Many countries have historically regulated the supply of betting services through a monopoly operator, often state-owned and landbased. Choice and competition are consequently restricted, as are related product attractiveness and innovation. With the advent of online betting, that

predominantly land-based supply has been challenged by offshore betting services, often providing a modern, broader product catalogue. The consumer migration to those offshore services has resulted in jurisdictions losing oversight and control of consumer gambling activity, along with taxable revenues. This has caused policymakers around the world to reconsider their regulatory approach to the availability of sports betting services, notably online.

The Canadian experience Ontario is a useful case study. It broke away from the monopoly model in operation across Canada and introduced an online sports betting-licensing system that has been operational since April 2022. As a result, Ontario’s onshore sports betting channelization is expected to reach 92 percent in 2024. In contrast, the rest of Canada combined is forecast to have an onshore rate of around 11 percent and is expected to lose $2 billion in taxable sports betting GGR offshore during 2024-8.

While operator licensing and the related availability of betting services are fundamental pillars of any successful, onshore sports betting market, they cannot alone be expected to ensure a high onshore consumer channeling rate and taxable returns.

Ontario’s onshore sports betting channelisation is expected to reach 92% in 2024 and then rise to 97% by 2028. In contrast, if the current monopoly regulatory position were to remain, the rest of Canada combined is forecast to continue to languish below 15%, with an onshore rate of around 11% in 2024 becoming 13% by 2028.

EXPECTED ONSHORE SPORTS BETTING CHANNELLING IN CANADA (20 28e)

97%

3%

The establishment of a successful market is also linked to the types of sports betting products that operators are permitted to offer, as well as wider issues such as taxation, licensing costs, advertising, bonuses and the availability of other forms of gambling.

Impact of In-Play Sports Betting

Just under half (47 percent) of all sports bets are forecast to be placed in-play (or live) in 2024, equating to around $28.4 billion in GGR. In-play betting is a particularly popular product with consumers and is forecast to account for 51 percent ($47 billion) of sports bets by 2028. Understandably, most jurisdictions in the study, and indeed more generally where betting is regulated, permit a wide availability of in-play betting through both land-based and online channels.

Australia, however, has banned all online in-play sports betting, which is the primary reason for its low onshore-consumer-channeling rate, which is expected to remain relatively stagnant (78 percent in 2022 to 79 percent in 2028) under the current regulatory regime. The adverse impact on channelization is also apparent in Germany, which restricts in-play betting to a limited number of markets,

13%

87%

compounding wider betting-product restrictions. Germany is forecast to have a relatively low, 60 percent, onshore channelization in 2024.

In contrast, jurisdictions that permit in-play betting have noticeably higher onshore consumer-channelization rates. Ontario, which only opened its market in 2022, immediately overtook the German market’s onshore sports betting-channelization rate and is expected to overtake Australia’s in 2023-4. Ontario is expected to have a 92 percent onshore rate in 2024. Whilst the well-established market in Great Britain, which similarly permits in-play betting, is forecast to have 97 percent onshore channelization.

A lack of in-play betting is one of the most distortive restrictions in sports betting markets, driving consumers offshore. It intensifies an already burdensome fiscal operating position in both Australia and Germany. It has been calculated that, over a five-year period, the legalization of online inplay in Australia would lead to around $1 billion of additional incremental tax revenues being brought onshore. For Germany, this figure would be over $400 million.

A common rationale for limiting or prohibiting in-play betting is a supposedly heightened integrity risk

available, notably based in Asia.

Maximizing onshore channelization, regulatory oversight, taxable revenues and associated consumer protections, and sporting-integrity benefits, requires an attractive product offering. The availability of in-play betting is fundamental to that.

Football: The Key Driver Of Onshore Channelling

However, a 36% increase in wagering activity would still leave German gross win per adult materially lower than comparable markets, showing that in-play restrictions are not the only product headwinds in the market.

(compared to pre-match). However, this argument lacks a firm evidence base: Most in-play markets can be offered pre-match. Furthermore, an analysis of the suspicious betting covering all sports during 2020- 23 shows that around half (49 percent) had a pre-match element. Prohibiting or restricting in-play betting also does not unduly hinder corrupt activity, especially with a sizeable offshore unregulated (or black) market

LICENSING IS FUNDAMENTAL TO A SUCCESSFUL MARKET

The regulatory and licensing framework provides the foundation of any policy on the availability of betting, both land-based and online. Many countries have historically regulated the supply of betting services through a monopoly operator, often state owned and land-based. Choice and competition is consequently restricted, as is related product attractiveness and innovation. With the advent of online betting, that predominantly land-based supply has been challenged by offshore betting services often providing a modern broader product catalogue.

LOST TO GERMANY IN INCREMENTAL TAXES OVER FIVE YEARS

The consumer migration to those offshore services has resulted in jurisdictions losing oversight and control of consumer gambling activity, along with taxable revenues. This has caused policymakers around the world to reconsider their regulatory approach to the availability of sports betting services, notably online. Canada is a useful case study where Ontario broke away from the monopoly model in operation across Canada and introduced an online sports betting licensing system that has been operational since April 2022. As a result, Ontario’s onshore

Betting on football (soccer) is forecast to generate $53 billion in GGR from around $570 billion in turnover in 2024 and is the dominant sports betting product, with over 56 percent of the regulated betting market gross win globally. It is a strong online product, providing nearly 65 percent of all football GGR. Europe and Asia are forecast to account for 85 percent of all (online and land-based) football betting GGR in 2024.

Football, basketball and tennis account for 86% of total sports betting turnover and 90% of gross win in the market: however, given the current catalogue of betting restrictions, there are periods over the summer where Germany will have practically no football or basketball and limited in-play tennis wagering. In-play is a particularly prominent product in tennis wagering, representing almost 90% of the sport’s betting turnover globally.

92%

Over the same five-year period, Great Britain is expected to lose $46m in taxable revenues offshore, equivalent to around only 9% of the tax revenue lost in Australia and 7% of the tax revenue lost in Germany. Similarly in-play permissive markets such as Italy, Denmark and Ontario are also expected to $416m

It is particularly noticeable that consumer onshore channelling is lower in markets that restrict football betting products. That channelization is impacted both by any limitation on the sporting competitions on which bets may be placed and by the types of bets offered.

Maximising onshore channelisation and thereby taxable revenues requires an attractive product offering and in-play betting is fundamental to achieving that. A comparison of the impact of in-play restrictions and its adverse effect on onshore online consumer channelisation is readily apparent when contrasting the regulatory regimes in Great Britain and Ontario, which both permit a wide in-play product offering, against Australia and Germany.

The main football betting markets

IN-PLAY ONLINE SPORTS BETTING CHANNELLING COMPARISON (20 22-28e)

425,000 MATCHES OFFERED

45 BETTING ALERTS

9,450 MATCHES PER ALERT

99.99% NO INTEGRITY CONCERNS

The two countries are calculated to have a combined loss offshore of over $900m in taxable revenues during 2024-28, which will be difficult to address while limitations persist in the largest sports betting product offering, and where football betting is calculated to account for around $750m of that lost taxable revenue offshore.

FOOTBALL CATALOGUE COMPARISON: ITALY, PORTUGAL AND GERMANY (2023)

Whilst both the main and side betting markets show a very low integrity risk relative to the number of matches offered, the integrity position with side markets is marginally better than the main markets: 99.99% v 99.96%.

Italy Portugal Germany

Catalogue Comparison % compared to Italy - 19% 18%

The rationale for prohibiting side markets is to ban the market as a supposed means of removing a significant integrity risk. However, a match alert often involves suspicious betting across multiple markets. A more granular assessment has therefore been undertaken of the markets (rather than matches) on which suspicious betting took place.

Lost Betting Tax 2024-28e* $97m $211m $534m

Note: *Assuming offshore sports split is the same as onshore. Excludes five-a-side, futsal, beach football.

That comprehensive analysis shows that of the 1,174 occasions that football (soccer) betting markets showed suspicious activity, only 5% involved side markets. Even when considering that side markets are not offered with every match (nor is every type of main market), accounting for around half of the overall football match offering, it is nevertheless clear that these markets are not the favoured product for corrupters.

SUSPICIOUS BETTING BY MARKETS TARGETED % SPLIT (2017-23)

The process of restricting betting and providing lists of approved sporting events and bet types, and the constant review and updating of that approach, invariably involves additional administrative and monitoring cost burdens on both the regulatory authority and its licensed operators. Such practices are of questionable positive societal or integrity impact given the limitations of any national approach in a fragmented global market of differing regulatory models.

At the same time, offshore operators will continue to offer whatever types of betting products they chose without any regulatory limitation, oversight or possible sanctions, nor is there any requirement on those operators to engage in responsible preventative actions to protect consumers or sporting events from manipulation. Restricting product availability invariably hampers that market’s development with consumers gravitating to offshore sports betting operators offering a larger and more attractive competition catalogue.

95% MAIN MARKETS

COMPETITION TIERS

(result, handicap, goals) generate the highest spend and are widely offered in most regulated jurisdictions. These markets are forecast to generate over $500 billion in turnover in 2024, with $370 billion coming from online betting, and a total gross win of $46 billion. The availability of these markets therefore has a significant impact on consumer engagement with onshore licensed sports betting operators.

5% SIDE MARKETS

Betting has been restricted on certain levels of football competition in the Netherlands and Sweden. For the Netherlands, the prohibition on betting on matches below the third division is only applied to Dutch football but is nevertheless impactful given that it relates to a product that has a particular consumer base in the Netherlands. For Sweden, a limitation of Divisions 1-4 is imposed across all global football betting markets offered by its licensed operators.

A key reason for this is the lower maximum stake size offered by regulated operators on side markets compared to the main betting markets. Internal risk management processes are also adjusted to account for potential suspicious betting activity on those side markets, which is primarily cards and corners betting.

A perceived concern regarding the integrity risk from lower-level football is often cited when such restrictions are imposed. However, competition alert level data shows that matches from tier 5 and lower account for only 10% of all football alerts, and tier 4 and lower 17%. Tiers 1-3 account for over 60% of alerts.

Competition tier restrictions often fail to recognise the existing operator risk management systems employed by well-regulated operators, and many jurisdictions permit their licensed operators to offer consumers risk assessed markets at any level.

of around $750 million in taxable revenues from football betting during 2024-8. There appears to be no clear rationale for these market restrictions: IBIA reported 359 matches that were the subject of suspicious activity in the main football-betting markets from around 950,000 matches offered for betting during 2017-23, suggesting a relatively low integrity risk.

It is therefore unsurprising that onshore channelling is noticeably lower in jurisdictions that place restrictions on these core footballbetting products. The approaches employed by Portugal and Germany are particularly restrictive: They offer only 18-19 percent of the competitions permitted in Italy, for example, and lag some way behind Italy’s 94 percent onshore channelization.

The two countries are forecast to have a combined loss offshore

Restrictions on a core product like the main football betting markets penalize onshore operators and consumers, and serve to encourage the latter to seek prohibited betting products offshore. Establishing a viable and effective, regulated, onshore betting market requires a wide product range to be available and one that is importantly able to compete with any offshore offering unhindered by product restrictions.

Side markets (cards and corners) are the subject of a wider set of limitations amongst the jurisdictions in the study.

Key: Permitted Prohibited

FEATURE: IBIA

To put this into context, comparing the integrity risk for the men’s ATP Challenger Tour and ITF women’s equivalent W40-100 & WTA 125 during 2021-23 shows that the women’s tour is again significantly lower, accounting for only 20% of alerts compared to 80% with the ATP Challenger Tour.

ITIA TENNIS ALERTS FOR ATP AND ITF/WTA CHALLENGER LEVEL % SPLIT (2021-23)

80%

ATP CHALLENGER 50-175

TENNIS BETTING GGR SPLIT BY REGION (2024 e)

20%

W TA 125 & ITF W40-100

The Challenger Tour is an important part of the tennis betting product, and its prohibition would make the offshore market attractive to consumers wanting to wager on that tour. It is therefore important that the Challenger Tour is permitted with licensed onshore operators, but similarly also valid that the ITF W40-100 (along with WTA 125) is permitted for betting as an equivalent level competition, which shows a low integrity risk profile.

CONSUMER DEMAND

$4.4bn $2.6bn $0.7bn $0.3bn $0.3bn $0.5bn

It should be noted that the majority do not impose any restrictions. There is significant consumer demand for these products, which are forecast to account for around $70 billion in turnover and nearly $7 billion in GGR in 2024. To put that into perspective, it is larger than the total wagered on any other sport globally except for basketball and American football.

ITF competitions account for 17% of tennis wagering globally, and 43% of all matches on which operators offer wagering. There is clear demand for this product. Prohibition will lead to a significant reduction in total tennis wagering activity, as well as being a potential driver for consumers seeking the product offshore.

Tennis betting is particularly strong in Europe, which is expected to provide nearly 60% of the global total of $4.4bn in GGR in 2024. That is forecast to reach $6.3bn globally by 2028, primarily driven by European consumer spend and is expected to reach $3.3bn in GGR in that region. Strong growth is also expected in North America with a doubling in tennis betting GGR to around $1bn and more than doubling in Africa to $0.7bn by 2028.

MAIN TENNIS TOUR AVAILABILITY IN GREAT BRITAIN. PORTUGAL AND GERMANY (2023)

Seeking to restrict a product with that level of demand significantly heightens the drive for consumers to migrate offshore, where such markets are freely offered, unhindered by restrictions. However, the integrity risk is relatively low, with only five percent of suspicious betting market activity involving side markets. They are clearly not a favoured product for corrupters to target, with increased internal risk-management protocols and lower maximum-stake sizes often imposed relative to the main football markets.

suggests that the football market would increase by approximately 18 percent with the addition of those markets. That would generate an extra $118 million of tax revenue in the Netherlands over the next five years. In reality, the increase in tax revenue could be much higher, as it would bring some offshore players back onshore, capturing all of their offshore spend.

Negative Impact of Restrictive Tennis Product Offerings

Source: Grand Slams, ATP, WTA, ITF & IBIA. NOTE: Germany assumes Challenger 175, 125 & 100 available throughout 2023 (part of the updated list published in late 2023).

Portugal prohibits all ITF tennis. It is therefore no surprise that the Portuguese market generates a significantly lower proportion of wagering turnover on tennis than neighbouring Spain or Italy where betting on ITF is permitted. If Portugal were able to increase the proportion of wagering on tennis to the level seen in Spain and Italy, this would lead to an extra $122m in tax revenue over the next five years.

LOST TAX REVENUE FROM RESTRICTING TENNIS BETTING IN GERMANY AND PORTUGAL (2024-28)

Tennis is one of the most popular sports globally for betting, notably online. This is due to the sheer volume of matches worldwide and regular availability of competitions during the average week. The global regulated market is expected to reach $4.4 billion in GGR in 2024 and is forecast to be over $6 billion annually by 2028.

$122m PORTUGAL

The Netherlands prohibits cardsand-corners betting. The operator market data supplied for the study, along with data from other markets,

Tennis betting is a particularly strong product in Europe, which accounts for around 60 percent of global tennis GGR. Strong growth is also expected in North America, with a doubling in tennis betting GGR to

GLOBAL EUROPE ASIA LATIN AMERICA AFRICA NORTH AMERICA

Key: Permitted Prohibited

To put this into context, comparing the integrity risk for the men’s ATP Challenger Tour and ITF women’s equivalent W40-100 & WTA 125 during 2021-23 shows that the women’s tour is again significantly lower, accounting for only 20% of alerts compared to 80% with the ATP Challenger Tour.

ITIA

80% ATP CHALLENGER 50-175

around $1 billion by 2028. The main consideration regarding the availability of betting on tennis has been the ITF Tour, which has been banned in some jurisdictions due to perceived integrity concerns. The main tennis tours have, in general, shown a marked reduction in suspicious-betting alerts in recent years. While alert numbers may be higher, as a result of a significant number of additional tournaments –accounting for 76 percent of all tennis tours – the ITF Tour does not pose a heightened integrity risk compared to the other tours, from an alert-totournament/match-ratio basis.

20% W TA 125 & ITF W40-100

The Challenger Tour is an important part of the tennis betting product, and its prohibition would make the offshore market attractive to consumers wanting to wager on that tour. It is therefore important that the Challenger Tour is permitted with licensed onshore operators, but similarly also valid that the ITF W40-100 (along with WTA 125) is permitted for betting as an equivalent level competition, which shows a low integrity risk profile.

CONSUMER DEMAND

Tennis betting is particularly strong in Europe, which is expected to provide nearly 60% of the global total of $4.4bn in GGR in 2024. That is forecast to reach $6.3bn globally by 2028, primarily driven by European consumer spend and is expected to reach $3.3bn in GGR in that region. Strong growth is also expected in North America with a doubling in tennis betting GGR to around $1bn and more than doubling in Africa to $0.7bn by 2028.

There is clear demand for the ITF product, which accounts for 17 percent of tennis wagering globally and 43 percent of all matches offered. It is therefore no surprise that the Portuguese market generates a significantly lower proportion of wagering turnover on tennis than neighbouring countries that permit ITF betting, like Spain and Italy. If Portugal established a similar market to those countries, it would be expected to generate an extra $122 million in tax revenue over the next five years.

OVERVIEW

It is also important to recognize that the ITF W40-100, along with the WTA 125, are equivalent to the ATP Challenger Tour. The Challenger Tour is widely permitted, including in Portugal. However, in that jurisdiction the ITF W40-100 is prohibited, even though it accounts for only 20 percent of alerts compared to 80 percent with the ATP Challenger Tour. A blanket ban of all ITF tennis is disproportionate and counterproductive.

Enforcing a complete ban on ITF Tour betting clearly acts as a driver to access ITF products via the offshore market, where it is globally available. Prohibition also fails to recognise the nuances that exist between the various levels of that tour and the associated integrity risk, which has vastly improved.

Global Growth of Basketball Prop Betting

North America is forecast to reach around $5.4 billion in basketball GGR

With close to $8bn in GGR expected in 2024, global betting on basketball is forecast to reach over $11bn in GGR by 2028, albeit that will still be some way behind football (soccer) at around $71bn. While betting on basketball is popular in Europe and Asia, its forecast position as the second most bet on sport globally in 2024 is primarily due to the strong consumer demand in North America and the state regulation of betting that has been established across much of the US since 2018.

BETTING PRODUCT % SPLIT FOR BASKETBALL BY REGION (2024 e)

Note: Asia includes Oceania. Includes online and land-based betting. There is a wide availability of betting on basketball across many of the jurisdictions analysed in this study. However, restrictions on the number of competitions are imposed in Portugal and Germany. Restrictions on

are also imposed

is

FEATURE: IBIA

markets being targeted in total at an average of more than four different types of market targeted for each suspicious match. The core basketball markets were the target of that activity, namely: money line, spread and totals; there was no suspicious activity identified on player prop markets across the 360,000 matches offered for betting by the operators in this study, which accounted for over $270bn in betting turnover (handle) during 2023.

SUSPICIOUS BETTING BY MARKETS

TARGETED % SPLIT (2017-23)

by 2028 and will drive the majority of basketball betting growth globally, which is forecast to increase from $7.9 billion in 2024 to $11 billion in GGR in 2028. However, that will be supported by strong growth in Europe and Asia with over 20 percent and 30 percent increases in GGR to $2.3 billion and $3.2 billion expected during this period.

Around half (52%) of the suspicious betting was focused on markets related to the game result. The remainder was spread across the various half/quarter time periods, with no particular standout time segment targeted.

BASKETBALL BETTING ALERTS BY GAME PERIOD (2017-23)

While online betting led the product channel through which the majority of suspicious betting was placed, it is important to recognise that retail locations were also the subject of 20% of suspicious betting alerts. Monitoring for suspicious basketball betting should also include global retail activity if it is to be fully effective. 36%

Most jurisdictions assessed in the study permit a wide availability of basketball competitions and types of bets, with resultant high onshore channelization. The $1.7 billion in GGR forecast to be generated in Europe in 2024 is achieved despite the adverse impact of product restrictions in Portugal and Germany, which are particularly restrictive and counterproductive. This is contributing to a noticeably lower onshore channelization relative to productpermissive jurisdictions such as Great Britain and Italy.

The availability of proposition (prop) betting has been a particular focus of discussion in the burgeoning North American market. It is widely permitted outside of the U.S. but prohibited by some U.S. states on integrity grounds, notably player props. Given that around 55 percent of global basketball betting GGR in 2024 is expected to be outside of North America, it is reasonable to presume that prop betting on NBA and NCAA matches outside of the U.S. may exceed that of any individual U.S. state that may ban such activity.

Indeed, player-prop betting is widely permitted in other parts of

North America such as the Canadian provinces of Ontario and Alberta. As the U.S. and the wider North American sports betting market continues to evolve, notably driven by the adoption of more in-play activity (predicted to account for 65 percent of bets by 2028), products such as team and player props are expected to gain increased traction with North American consumers.

The operators in the study reported 59 basketball matches as being the subject of suspicious betting between 2017-23 from around 360,000 basketball matches offered for betting, suggesting a relatively low integrity risk. That suspicious betting was confined to the core markets (money line, spread, totals); there was no suspicious betting activity linked to match manipulation identified on player-prop markets.

There is no meaningful integrity benefit from excluding such markets, which are widely available globally. Prohibiting those products will make offshore operators more attractive. More effective and proportionate approaches to product availability are employed in many jurisdictions that serve to contribute to strong onshore market integrity, high onshore channelization, related taxation and regulatory oversight.

Importance of Monitoring and Alert Networks

Prohibiting the availability of betting markets is counterproductive to onshore channelization and integrity protection. A range of more effective

integrity measures are employed by regulatory authorities, such as information sharing and voiding suspicious bets. However, the principal means of protecting a market is through operators monitoring their customers’ transactions and sharing details of suspicious betting activity with a wider international-monitoring network.

This approach has proven to be highly effective and has been adopted as a licensing requirement across a number of European and North American markets and forms a central pillar of the new Brazilian regulatory framework. The study utilized customer account data from the International Betting Integrity Association (IBIA) – which is the largest monitor of its type in the world – and its members, who account for over $300 billion of global betting turnover (handle) per annum.

Emerging Sports Betting Markets

There are a number of jurisdictions that are in the process of regulating their online sports betting markets, notably across North and South America. Of particular significance is the proposed gambling regulatory change in Brazil. The current expectation is that a liberal market will be established in Brazil, which will achieve both a high onshorechanneling rate and tax returns from a forecast $2.3 billion in GGR in 2025. It is calculated that this approach could achieve $34 billion in sports betting turnover and $2.8 billion in onshore GGR by 2028.

Recommendations for Maximising Onshore Activity

This study shows that sports bettingproduct restrictions adversely impact onshore channelling, and that in turn has negative consequences for

regulatory oversight and taxable revenues. The central recommendation of this study is, therefore, that jurisdictions should permit a wide sports betting product range with onshore operators or accept that consumers will seek banned products offshore, and that regulatory oversight and tax revenue will be lost.

Alternatives to Prohibition

Whilst it may deliver the optimum market solution, it is acknowledged that moving from an existing approach of prohibition to permitting certain betting products is likely to prove a challenging step for some policymakers, even with clear evidence to support that approach. In that instance, consideration should be given to identifying the product-related reasons for offshore migration and how to make the onshore market more attractive without imposing ineffective, resource-intensive barriers. Whilst not delivering the optimal onshore market solution, proportionate, producttargeted options are more favorable to prohibition.

Sports Betting Integrity

The rationale for prohibiting markets is often on integrity grounds. But that approach is often not proportionate to the level of risk and is based on flawed

or unevidenced data. The principal means of protecting the integrity of a betting market and associated sporting events is through monitoring, and it is increasingly recognized that there is clear value from operators being part of a wider, international, integritymonitoring network. Nearly half of the jurisdictions in the study have adopted legislative provisions requiring licensed operators to be part of an international integrity-monitoring body, as have many newly regulated states across the U.S. An international issue requires an international approach.

About this Study

The purpose of the study is to provide a data-driven evidence base upon which policymakers can make more informed judgements about the availability of regulated sports betting products and how best to respond

to growing consumer demand for these products, while strengthening oversight of the onshore market and the fight against match-fixing.

The study analyzes and compares 12 jurisdictions where there is currently a wide variation of regulatory approaches: Great Britain, Italy, Ontario, Denmark, Spain, Sweden, Netherlands, Portugal, Australia, Germany, Canada (excluding Ontario) and Brazil. The US market is not specifically included due to the number and variety of state regulatory models but may be the subject of bespoke analysis at a future stage.

The study was developed in partnership with: Instituto Brasileiro de Jogo Responsável, Canadian Gaming Association Netherlands Online Gambling Association, and Responsible Wagering Australia.

MARCH MADNESS BOOSTS BETTING

Optimove Insights’ analysis of approximately 495,000 U.S. bettors and over 5.5 million bets reveal operators are set for an 87 percent surge in activity during March Madness

Estimated increase in total U.S. sportsbook players on March Madness game days compared to the monthly benchmark*

Estimated increase in total U.S. sportsbook players on March Madness game days compared to the monthly benchmark*

*Benchmark is the average number of sport bettors in February 2023 on non-game days

*Benchmark is the average number of sport bettors in February 2023 on non-game days

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

Optimove Insights, the analytical and research arm of Optimove, analyzed sportsbook players’ activities during March Madness, drawing from data from approximately 495,000 U.S. bettors and over 5.5 million bets. The data reveals that in March 2023 an 87 percent increase in total sports bettors was recorded, mostly attributed to increased betting activity due to March Madness. The analysis provides further insight into first-time depositors and other betting patterns during the tournament, shedding light on critical patterns and behaviors.

As a trusted CRM marketing platform utilized by four out of five leading U.S. sportsbook operators, Optimove offers unparalleled access to aggregated data, allowing for a detailed examination of player engagement, trends and wagering volumes.

1. March Madness game days saw an increase in the overall number of sports bettors

The data discloses that more consumers placed sports bets on NCAA March Madness game days versus non-game days (the comparative benchmark is 100

March Madness: Distribution of first-time depositors (bettors) vs existing depositors

March Madness: Distribution of first-time depositors (bettors) vs existing depositors

percent). The analysis compared the benchmark to the total number of bettors on March Madness game days and found that:

• The 1st/2nd Round (+87 percent) had the most significant increase in bettors. This could be directly connected to more teams in the hunt, which fans bet, and because there are more games (48 in total).

• The Sweet 16 (+61 percent), Elite 8 (+71 percent), and Final Four (+68 percent) showed a significant increase in the number of overall bettors.

• The Championship game day revealed a +27 percent increase over the benchmark.

• The First Four had an 18 percent bettor engagement over the benchmark on two game days.

2. A higher percentage of first-time depositors at the beginning of the tournament

The data revealed the highest number of first-time depositors (bettors) were on the First/Second Round compared to other March Madness game days.

Moreover, it showed a declining trend in the percentage of firsttime depositors relative to the total number of depositors in a day. Initially, the average number of first-time depositors was 1.5 times higher than at the end of the season.

3. Half of first-time depositors engage in the first third of the tournament

After the First/Second Round, half of first-time depositors were engaged, constituting 35 percent of the tournament days. The beginning of the tournament presents a higher potential for acquiring first-time depositors.

4. Players who bet 10 or more days make higher wagers

A player who bets 10 days or more of the tournament will wager 194 percent more than a player who bets only one day. Data shows, that, as the number of bet days increases, there is an overall rise in the average daily bet amount.

By understanding bettor behaviors and trends, operators can optimize strategies, enhance player experiences

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

3 (1 game)

First-time depositors Existing depositors

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

Half of first-time March Madness depositors make an initial bet in the first 35% of the tournament

Half of first-time March Madness depositors make an initial bet in the first 35% of the tournament

50% of first time depositors bet by the end of the second round

FirstFourMarch14-151stRoundMarch16-172ndRoundMarch18-19 March13

FirstFourMarch14-15 March22

FinalFourApril1ChampionshipApril3 April4 March21 March20 March29 March28 March31March30 March27

Sweet16March23-24EliteEightMarch25-26

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

Source:

and capitalize on the heightened excitement surrounding this premier sporting event.

Five recommendations for an impactful March Madness

In its analysis, Optimove outlined five recommendations for sportsbook operators to capitalize on the golden opportunity presented by March Madness. Leveraging the heightened interest and increased number of bettors during the tournament, operators can implement targeted marketing strategies and employ journey-orchestration techniques to guide first-time depositors through a tailored experience, maximizing engagement and retention.

Early Engagement Focus: Since new bettors exhibit heightened activity at the beginning of the tournament, operators should orchestrate player journeys to prioritize early engagement through enticing promotions, bonuses and offers. Operators can ensure that first-time bettors are nurtured and

encouraged to continue participating throughout the tournament, and beyond by strategically connecting with players at appropriate times.

Segmentation for Personalization:

Operators should understand that each customer represents a different potential lifetime value. Effective journey orchestration involves segmenting the customer base to understand diverse, likely, lifetime values. Operators should analyze player actions, identify high-value segments, and personalize efforts to cater to each group’s specific needs and preferences.

Segment-Based Retention Programs:

Operators should categorize customers into segments based on potential value (low-value, mid-value, VIP), orchestrating personalized retention programs for each segment to ensure effective nurturing and retention.

Crucial Post-Initial Interaction

Engagement: With around 50 percent

Optimove Insights 2023 March Madness consolidated sportsbook player data

FEATURE: OPTIMOVE

March Madness: U.S. sportsbook players’ wager amount is generally greater according to the number of days bets are placed

March Madness: U.S. sports book players’ wager amount is generally greater according to the number of days bets are placed

Source: Optimove Insights 2023 March Madness consolidated sportsbook player data

of players not returning after their first bet, journey orchestration becomes critical for post-initial-interaction engagement. Integrating effective retention strategies into the customer journey enhances lifetime value and long-term profitability.

Securing a Second Bet Within the First Week: Recognizing the critical

nature of the first two weeks for customer retention, especially securing a second bet within the first week, journey orchestration plays a vital role in delivering personalized experiences during this crucial period. Effective communication during this period can maximize engagement, retention, and profitability during March Madness and beyond.

FROM WORLDWIDE LEADER TO ALSO-RAN

ESPN Bet’s debut proves problematic.

By David McKee

That very public bromance between Penn Entertainment CEO Jay Snowden and Barstool Sports founder Dave Portnoy ended abruptly last year. Penn announced, via an earnings report, that it was jilting Portnoy in favor of bigger, better-known ESPN Bet. If the Penn/Barstool relationship began rosily, Portnoy caused it to rupture with his very public misbehavior.

The foul-mouthed social-media mogul proved a regulatory liability for Penn as it sought to broaden its online sports betting brand. Penn was rejected outright for New York State and licensed in Massachusetts only on a trial basis. Getting rid of Portnoy and

Barstool solved those problems at one fell swoop.

Penn’s problem child

Wall Street agreed. “Well, it was fun while it lasted, but, in our view, the handwriting has been on the wall for some time,” wrote Deutsche Bank analyst Carlo Santarelli. “The Barstool partnership was not working, the risks were too significant, and Penn was at a crossroads.”

J.P. Morgan stock boffin Joseph Greff concurred. He opined, “the loss of Dave (for all the mixed press, he had an ardent social media following) and other Barstool Sports personalities is cushioned by Penn’s access to ESPN personalities.”

Penn got the ESPN alliance for a relative pittance: $1.5 billion for 10 years, plus the option to renew for 10 more. The sports giant could, in turn, buy up as much as 19 percent of Penn shares.

Portnoy shot Penn in the keister once too often when he dissed the company publicly. That move cost it $63 million in market capitalization in a single day. He had become, clearly, too much of a problem child for the shareholders to accept.

Action Network saw other problems: “Stoolies skew younger and have a lower net worth, meaning they have a shorter gambling outlook and fewer dollars to play with. Penn’s Barstool was also late to plenty of markets and its interface was abysmal next to market leaders in DraftKings and FanDuel.” Retooling with ESPN provided a second chance to make a first impression.

Santarelli prophesied “ESPNBet will experience a notable handle and gross gaming revenue market-share increase post launch,” and he would be proven correct. He amended that forecast with the prediction “it will take at least a year from launch to determine whether the customer-acquisition strategy has been successful or whether the early promotional spend simply rented customers who were lured by free money.”

Nor was that all: “We remain hesitant to ascribe too much value to the power of the ESPN brand as it pertains to customer acquisition and more important, retention within this space, especially given how late the partnership already is to the competition.” Santarelli observed that

Penn is still outside the $12 billionplus online-sports-betting market of New York State, requiring it to overcompensate elsewhere.

Fizzle or sizzle?

Fast-forward and Wall Street has cooled somewhat on the newcomer, in part because of having to start from zero in terms of market share and partly due to the high cost of entry. A disproportionate amount of promotional spending has been attributable to ESPN Bet, at a time when the OSB industry is trying to keep such outlays down. Also, after an initial, novelty-factor bump in business, its takings have receded.

The one area in which ESPN Bet has made a discernible dent is with female bettors. It marketed to them early and often. By contrast, its competitors still pitch their offerings using macho blowhards as exemplars.

During Global Gaming Expo, in Las Vegas, Truist Securities analyst Barry Jonas surveyed rival operators and found they were unfazed by the newcomer, “with no one seemingly changing tactics at this point.” As for customer acquisition, Jonas felt that sanity was prevailing, with operators now more focused on return on investment rather than “market share gains by any means.”

However, “operators noted that product quality remains critical for consumers, and that ESPN Bet’s mid-season entry with … incomplete product could present challenges for their customer retention.” The strength of the ESPN brand was undisputed. If it could leverage its digital-media strengths, rivals thought, “ESPN Bet could become a competitive offering.”

ESPN on acid

Revisiting his earlier thesis, Santarelli still felt that the newcomer would grow the market by dint of promotions, that ESPN Bet was targeting a more casual bettor and that overall marketing strategies were unlikely to change. The jury remains out on whether his mid-

November prognostication is proving true.

The acid test, it is widely believed, will come when North Carolina debuts OSB, as happened recently. This is the first state in which ESPN Bet starts with a level playing field, launching at the same time as all the other OSB providers. The puissance of the ESPN brand will have to prove itself against the name recognition of FanDuel and DraftKings. Failure to deliver could be damning for “the worldwide leader in sports.”

Other considerations have also intruded, as when a February webinar on OSB integrity raised the issue of conflicts between ESPN’s broadcasting and bet-making agendas. The panel raised the issue of improper influence on oddsmaking by the media, especially with new players in the space, such as ESPN and FanDuel TV.

“That’s a senior thesis,” said SharpRank founder Chris Adams.

“We see stories weekly about the conflicts of interest between these two factions.” Indeed, ESPN anchor Rece Davis would make headlines soon thereafter by opining that a point spread constituted a “no-risk investment.” Davis, in the ensuing furor, had to walk those remarks back.

A springtime boost

At press time, ESPN Bet enjoyed a lift from a Truist Securities survey of bettors. DraftKings was, Jonas announced, “a clear winner … though we also received positive feedback around ESPN Bet.” He elaborated that such a favorable response “reinforces our belief in its potential to succeed longer term.”

To the benefit of ESPN Bet, it was survey-respondents’ first choice for checking scores (44 percent). The majority of those respondents (52 percent) found it likely that ESPN Bet would become their primary betting site.

Jonas reiterated a liking for ESPN Bet, explaining his August downgrade of Penn stock as a reaction to the difficulty of executing a new launch, given the costs that would impede profitability, especially compared to the incumbents. Still, Jonas took a wait-and-see attitude, expecting its market share to increase, but without having enough clarity to see how much of that would translate into profit.

No tears needed to be shed for Portnoy. One the eve of the Super Bowl, DraftKings inked a pact to make Barstool Sports the new mouthpiece of the company. DraftKings CEO Jason Robins told Wall Street analysts he felt the return on investment from the Barstool pact to be “solid,” with the association lending DraftKings an even higher profile. Whether that higher profile comes with risks for publicly traded DraftKings remains to be seen.

MARCH 2025 - CAPE TOWN, ZAF

FEBRUARY 2025 - DUBAI, UAE