First Steps: Launching sports betting in the United States
Numerous jurisdictions are eager to launch sports betting—here are some important items to consider during the planning stages
The U.S. Supreme Court’s striking down of the Professional and Amateur Sports Protection Act (PASPA) in May 2018 began a dramatic upheaval of America’s sports wagering landscape that is still causing seismic shockwaves throughout the industry. Operators, suppliers and regulators are scrambling to comprehend how to best go about moving forward with this newly unfettered form of highly transactional, dynamic, sophisticated and complex type of sports-based gaming.
From a regulatory perspective, several factors must be determined when looking at implementing a sports wagering operation. First, legislators and regulators must decide which jurisdiction sports betting falls under. Potential choices include:
- Racing commissions expanding to allow wagers on sports;
- Casino commissions expanding to include sportsbooks in casinos;
- Lottery commissions expanding to allow retail sports betting purchases much like lottery ticket purchasing;
- Charitable gaming commissions incorporating sports betting into their charitable operations (e.g., place a bet while at the location charitable gaming is taking place);
- New commissions dedicated to sports betting; and
- Tribal gaming commissions.
Regulators must also concern themselves with whether there are any conflicts with existing local laws, state laws or tribal-state compacts. One approach would be to look at the entire lifecycle of a sports wagering enterprise and determine how each stage is affected by the regulatory requirements. Questions to ask and answer that will help determine this regulatory scope include:
- How does the system validate the identity of the players and confirm they are authorized?
- How are games/lines set and opened to start? Is this a manual or automated process?
- Are wagers being placed and settled within regulatory and jurisdictional boundaries?
- How are bets accepted and placed on the system? Are there risk control parameters in place to limit liability for the casino?
- How are line updates received and implemented by the system?
- How are wagers settled and paid by the system when the events end?
- What reports are generated by the system (financial reports, transaction reports, exception reports, etc.)?
WHAT RULES WORK BEST?
While it may appear to be simple on the surface, one of the significant pitfalls facing sportsbook operators is that their players don’t fully understand the details of what they are wagering on. Let’s say two teams go into overtime. Eager bettors cheer for their respective squads and when the final score is posted, the holders of the winning tickets happily storm the betting window to collect their winnings. But hold on… not so fast. It turns out that their wagers didn’t include overtime and a tie at the end of regulation and, therefore, their winning tickets turn out to be losers. Not clearly understanding exactly what they were betting on results in lots of frustration and potential lost business.
While this is a simple example, the complexities of wagering rules increase exponentially when such considerations as ticket buybacks, teasers, game rainouts, injuries and many other variables are factored into the equation. If there is ambiguity in the posted rules, it can lead to disagreements between the player and the house on bets—potentially damaging the integrity of the game and loss of goodwill for the business.
The process of delivering wagering options over various channels of online distribution increases the complexities and vulnerabilities of these transactions exponentially. For example, mobile wagering does not have the traditional physical safeguards familiar to a brick-and-mortar betting establishment. There are no printed tickets, no cash reconciliation, no surveillance cameras, no secure cash rooms or live tellers to ensure the proper handling of each wager. Therefore, the same kind of robust controls found in other forms of online gaming must be employed to prevent underage play, thwart money laundering and provide accurate reporting of online monetary transactions. This entails such things as acoount-based wagering, where a patron establishes an online account through a mobile betting app or online betting portal; uploading their personal and credit card information to a secure site where the information can be used for a variety of betting transactions. These types of technical controls can afford operators and regulators a much more detailed and robust ability to conduct investigations due to the wealth of information that can be stored at a transactional level. However, this is only possible if the systems are storing this data in a way that can be utilized.
To mitigate these inherent risks involved in mobile wagering, it is essential that the online sportsbook platform is thoroughly tested and certified as compliant to the appropriate jurisdictional standards governing online sports wagering. To that end, Gaming Laboratories International (GLI) offers comprehensive testing of these online sportsbook platforms in a laboratory setting to ensure compliance with these regulations, thereby confirming the integrity of the platform.
For 30 years, GLI has been at the forefront of helping operators, suppliers and regulators around the world develop successful sports wagering strategies. GLI tests and certifies a wide variety of sports wagering, including online, non-sports event-based wagering, fixed-odds betting, pool betting, parlay betting and betting exchanges. This testing assures that wagers made online for events comply with appointed jurisdictional standards and that these wagers are accepted in a fair and secure manner.
GLI’s extensive sports wagering knowledge, technical capabilities and expertise also help ensure that the platform functionality, payment and third-party integration of sports wagering operations will be successful right out of the gate.
Additionally, GLI has also been at the vanguard of pioneering testing for daily fantasy sports (DFS), including developing a unique service for fantasy sports applications which does not depend on the historical performance of actual fantasy players; allowing for such analysis to take place even before new games come to market. SBM
To learn more about GLI’s industry-leading sports wagering testing, assessment, certification, and consultancy services, please visit www.gaminglabs.com.