THE PAYMENTS PROCESS IS PROVING PIVOTAL FOR STATES TO EMBRACE TO ONLINE SPORTS BETTING

As

Paysafe’s Zak Cutler discusses

BY CALLUM WILLIAMS

You could be forgiven for thinking that the repeal of PASPA was more than five years ago because since then, over 70% of US states have legalised sports betting, with a handful more either mulling over new legislation or preparing for launch.

But the US has had to play catch up to the rest of the online betting world, most notably when compared to the UK and Europe, where gambling has been able to innovate and improve thanks to the introduction of mobile betting apps, defined regulatory guidelines and, most crucially, the speed of gambling transactions.

America is not only catching up in terms of online gambling, but also the ability to integrate faster payments into wider society. The UK, for example, introduced faster payment rails in 2008 and since then has made almost-instant payments not just a want, but an expectation, bolstered by the proliferation of open banking. Whilst the US is progressing with its real-time payments rail - which is expected to be updated with the FedNow payment rail to enhance the quickness of transactions - it took up until 2017 to establish its own faster payments rail. And whilst sports bettors love nothing more than winning big, winning big and receiving those wins in an instant is almost just as good.

This was highlighted by Zak CutlerPresident of Global iGaming at Paysafe - as he reveals that 36% of players prioritise a quick and easy payout when deciding an online sportsbook brand to choose. Cutler spoke indepth about how alternative payment methods are also moulding the players user experience to be as frictionless as possible.

He said: “To maximise the acquisition potential that payments provide, it’s important that online and mobile sportsbooks deliver the payments journey that players are seeking. This goes beyond just the speed of payouts to include the availability of alternative payment methods and providing confidence to consumers that transaction security is at the highest level.

“Alongside player acquisition, which is obviously important for operators looking to expand in newly regulated markets, keeping players engaged is also a critical factor. Operators need to deliver an enhanced payment experience that’s fast and seamless, where players encounter the least amount of friction possible.

“In fact, enhancing the payments experience has already proven to be particularly crucial for customer retention in newer markets like New York, where 85% of players in the year-old igaming market cited the experience of frictionless payouts as a key factor when choosing to stay with a particular sportsbook brand.”

Finding the right payment guidelines for players to abide by is now a pivotal consideration for regulators when it comes to building legislation surrounding online sports betting. However, the states are in control, and any form of one-size-fitsall gets thrown out of the window.

Alternative payment methods are continuing to take shape too, whether it be the introduction of digital wallets or the rise of prepaid debit cards, there has never been more options for lawmakers to choose from to meet the diverse range of payment requirements.

“Consider Iowa’s online sports betting market, which launched in 2019 and where regulators have placed a ban on the use of credit card payments for any form of betting,” Cutler continued.

“Despite this nuance, there are ways for operators to meet players’ diverse payment preferences by offering a mix of traditional payment methods, such as debit cards, alongside alternative solutions.

“These nuances, which vary from state to state, suggest that offering a wide range of payment options not only improves the user experience for players, but can also lead to market differentiation when working within each state’s regulatory framework.”

And one state that has taken all of this into account is Massachusetts, with the home of the Boston Celtics and New England Patriots recently launching its sports betting operations, lawmakers have been keen to get off to a good start considering how passionate of a sports state

Massachusetts is.

When asked about whether there are any use cases from another sports town like New York with their player payment preferences and if that can be translated over to Massachusetts, Cutler explained that it isn't exactly a one-size-fits all approach.

He commented: “Our most recent igaming research found that despite the hundreds of millions of dollars spent by operators on marketing and ad campaigns, payments are still the key differentiator that many players consider when choosing where to wager online.

“This finding reinforces the importance of offering players the option to select their preferred payment method for operators looking to acquire new customers.

“Our research also revealed that when it comes to selecting a sportsbook to wager with, online sports bettors are prioritising quick and easy payouts above brand trust, betting odds and promotions. Alternative solutions, such as digital wallets, overall offer a premium user experience for players, enabling them to make instant, safe and secure payouts, without the requirement to share financial information with the operator.”

But as digital wallets and other payment methods begin to explode in usage and the user experience becomes increasingly more frictionless, this isn’t to say that there hasn't been growing pains since the repeal of PASPA back in 2018.

Card issues arose as soon as states started to open their arms to sports betting, with many cards being declined and the process of placing a bet became a lot more strenuous. Add on top of that real-time payments were just getting off the ground in the US and were running into problems of their own.

Cutler shared that this was resolved by the work of payment providers and banks coming together to create a coding and classifications system designed to make the transaction process smoother but also, and more importantly, fully functional.

So as sports betting in America now appears ripe for further expansion and growth, Cutler turned his attention to what more can be done from payment providers like Paysafe to eliminate occurring pain points to create a seamless betting experience.

“There’s always opportunity for improvement, whether that’s enhancing the payments landscape overall or developing new solutions,” he concluded.

“To better serve the payments journey, operators and payments providers need to address the most basic pain points and create an experience that’s intuitive, fast and secure.

“As operators look to take a larger slice of the US regulated market, another key industry focus for this year will be responding to player demand for faster payments. This demand speaks to the improvements we’ve made to our own product suite, particularly our Skrill digital wallet, where we’ve made it possible to support instant funding of the wallet through the player’s bank account.

“The immediate effect of this enhancement is that we’ve effectively reduced the time it takes to make a deposit and limited the number of clicks that players must go through to simply fund their deposit.” •