Tapping into the Opportunities of the U.S. iGaming Market

We have seen a voracious appetite for online gaming in the United States, and it is only getting stronger. The number of states that passed legislation in 2021 far exceeded all expectations, and we can expect a steady increase in the years ahead. Initially, the procedure can be intimidating for organizations seeking to break into this market, but the rewards on the horizon far outweigh the challenges.

In this interview, Jesper Kärrbrink, Co-founder and Creative Director of Green Jade Games, and Elena Kvakova, Head of the U.S. Market at Internet Vikings, discuss insights to assist businesses in understanding the significant market challenges and opportunities as well as aid in the development of a flawless market entry strategy.

Elena and Jesper, given your expertise in the U.S. market and years of iGaming industry knowledge, what do you believe are the most significant considerations for companies entering the U.S. iGaming market?

Elena: First and foremost, businesses should strap in for the long haul by investing time in research, keeping abreast of industry developments, such as new players entering the market, new states enacting legislation, and legal challenges certain companies are confronted with.

Jesper: It is essential to keep in mind that you cannot enter the U.S. market alone. You must have a partner or company sponsorship, which is why securing an agreement or letter of intent with a partner who is already accredited (in the state you intend to enter) is critical. Get a head start by connecting with businesses already operating in the market that can offer valuable advice based on their experiences and day-to-day responsibilities.

What advice can you give companies in terms of license applications and processes based on your own experience?

Jesper: When determining which state to launch in, choose the one that offers the most business potential. Follow the demand and enter each state one at a time to prevent becoming overwhelmed by the application criteria.

Elena: Prepare to devote a significant amount of time to complete a large number of application forms and consult with professionals. Multiple states have comparable standards, so entering additional states will be much easier after you have cleared the first hurdle. Collaborating with a skilled legal and compliance team will also help to streamline the process of obtaining the necessary registration and licenses and completing state filings.

Being immersed in the market's happenings over the past year, what changes have contributed to the evolution of the U.S. iGaming market?

Elena: One of the extraordinary things we have seen is that 25 states have enacted online sports betting legislation, exceeding the initial forecasts of two or three states. I think we will continue to see more states getting on board as this year has proven that states are realizing that online gaming can be conducted safely while providing entertainment and generating additional tax revenue.

As experts who have been observing the U.S. gambling market for a few years, what trends do you anticipate in the next five years?

Jesper: We should certainly start seeing a rise in the number of European companies entering the market, increasing competition, and the transition from Gray to legal markets.

Elena: I believe that another four to eight states will likely pass legislation with a sportsbook license as a stepping stone to further legalization in the next two years. In addition to sportsbooks, more states will pass legislation to regulate online casinos, with Indiana and Idaho being the next states to join this cohort.

All eyes have been on three major iGaming markets in the United States, including New Jersey, Michigan, and Pennsylvania. How do the regulations in these states differ?

Elena: Operators, suppliers, and affiliate marketers are all regulated similarly in New Jersey and Michigan, with the lowest licensing tier being that of a vendor in both states. On the other hand, Pennsylvania requires a gaming service provider license immediately, which necessitates a more detailed application, personal disclosure, and financial forms.

In your opinion, what factors have contributed to the success of New Jersey, Michigan, and Pennsylvania?

Jesper: All three states are successful since they provide online casinos as well as online sports betting, which generates additional revenue. As a result, operators can serve more customers with a broader selection of games.

Elena: Obviously, Michigan has followed in the footsteps of New Jersey and Pennsylvania, which were pioneers in statewide online gambling, and Michigan is already ahead of them now. The perfect timing of Michigan's launch right before March Madness and the Super Bowl, also played a role in their success.

Given your own experience with the application process, can you provide your perspective on what businesses should expect when going through the procedure themselves?

Jesper: In my opinion, these markets have a robust operational, and regulatory basis and are not difficult to enter; nonetheless, all of your legal and technical processes and documentation must be in order to avoid delays.

Elena: The complex application process can be made easier if you start preparing your teams in advance — i.e. making organizational structure changes if needed, and implementing the required internal procedures. Processing times are quite reasonable in the states of Pennsylvania and New Jersey, although businesses should be prepared to wait longer than usual for Michigan due to a backlog of applications as a result of the enormous popularity of its launch this year.

Now for the burning question: which of the forthcoming states do you believe has the highest potential for growth in the coming years?

Elena: Mississippi, Georgia and California are the states that I believe are most likely to pass legislation in the near future. I think West Virginia will soon catch up to Michigan in terms of revenue, and Colorado is another sports-betting-only state that sees steady month-to-month growth.

Conclusion

Although entering the U.S. presents its challenges, once there, the procedures for each regulation are relatively similar, and the market becomes one. The result of increased state consolidation will be a sector that matures faster than any other, opening up dozens of new prospects. To sum up, if you are considering entering the American iGaming business, you should undoubtedly get on board sooner rather than later.