The Federal Wire Act and the recent Department of Justice interpretation which essentially restricts activity of all types of gambling, became a talking point at ICE.
During panel discussion on creating an international sustainable sports betting market, Nick Nocton, a partner at Mishcon de Reya, said, “We waited over five years with people discussing whether the U.S. would legalize sports betting, and now even now it has opened, it has shot itself in the foot.”
Spectrum Gaming Capital CEO Rob Heller, the panel’s moderator, covered sports betting in the U.S., United Kingdom, Puerto Rico, Brazil, Argentina and India. Comparisons were made across the markets, with a particular emphasis on those who are just now regulating for sports betting.
Speakers from Puerto Rico, Brazil and Argentina said the three countries are in the process of drawing up bills for regulating sports betting. Sebastian Vivot, chief Technical officer for LotBA Buenos Aires indicated, legalization began last year, with the regulatory framework expected to be in place by April. Operations are anticipated to be running before the end of the year. In several regional provinces, the activity is underway.
Brazil is expected to have a slightly later rollout, and Puerto Rico is broadly anticipating a smooth transition into legal sports betting, due to the confidence which comes from having a gambling jurisdiction which dates back to 1948 – one that is almost as old as Nevada.
In India, Nick Norton explained the driving force behind a reluctant move toward sports betting legalization was a recognition of the scale of the “grey” or unregulated market, especially around cricket. He said lack of consumer protection and sport integrity are the consequences of an unregulated market.
The was some degree of similarity in the panelists’ answers when asked what they saw as the biggest regulatory or legal problem in the transition to legalized sports betting.
In Brazil, the issue concerned how to put in place a strong regulatory environment, with sufficient technological infrastructure to meet the fiscal challenges ahead. Recent moves to privatize the National Lottery were cited.
Jaime Irizarry stated that in Puerto Rico, “the only thing we cannot handle are politicians… I used to be one myself.” He spoke of previously failed efforts to prevent illegal gambling and the need for educating politicians on what works and what doesn’t.
The U.S. was criticized for taxation mistakes and the failure to recognize the scale of unregulated activity. The panel agreed successful regulation includes a good tax model, enough that allowed legal operators to make a profit to drive out the black market. Bill Gantz, a partner at Dentons U.S. LLC, suggested the Massachusetts model. Online betting is taxed at 12 percent and land-based is taxed at 8 percent.
The UK was viewed as a mature gaming market – with a very limited black market – with viable regulation. The UK’s “sustainable commercial model” was seen as enabling the maintenance of political imperatives, consumer protection measures, prevention of problem gambling, and preservation of sports integrity. Panelists regulation makes the market succeed.
