Change needed in US wagering
CEO Proposes Aligning Tax Rates with Operator Hold Rates to Enhance Competitive Balance.
In an insightful open letter directed to U.S. sports betting regulators and legislators, Sporttrade Founder and CEO Alex Kane succinctly articulated his vision for the industry: “If the goal is to have as many players as possible choosing to play in your regulated market, there must be significant changes to your regulatory approach. You must consider making a sincere effort to welcome innovative companies into your regulated market.” This statement emphasizes the necessity for a proactive and inclusive strategy as the U.S. sports betting landscape continues to evolve.
Nearly seven years post the Supreme Court’s landmark ruling that endorsed the widespread legalization of sports betting, the discourse surrounding this sector has taken a distinctly negative turn. Concerns over increasing instances of problem gambling have surged, prompting some legislators to explore avenues for reversing legalization in their states. Moreover, the specter of federal intervention looms larger, introducing an air of urgency to the ongoing discussions.
Kane’s open letter simultaneously acknowledges these challenges while also illuminating a potential path forward, advocating for a more optimistic outlook for the industry. Through this approach, he seeks to steer the conversation towards solutions rather than solely focusing on problems.
Growth of Platforms Operating Beyond Regulatory Oversight
In contrast to many prominent operators focused primarily on appeasing investor interests, Kane emphasizes a customer-centric approach. He astutely points out that “without the player, there is no industry.” This perspective is particularly pertinent as the number of platforms operating outside the constraints of state-imposed regulations has reached unprecedented levels. These platforms include those utilizing the “social gaming with sweepstakes prizing” model, alongside prediction markets regulated by the Commodity Futures Trading Commission (CFTC) that mimic the peer-to-peer wagering framework of Sporttrade. Additionally, the presence of offshore sportsbooks continues to be a significant factor in the market.
“If your objective is to maximize engagement in your market, something must change,” Kane stated. “Players are increasingly gravitating towards venues that operate outside of your oversight.”
As he concludes his correspondence, Kane stresses the urgency of transformation: “Let me say in no uncertain terms: without an overhaul that creates a realistic pathway for entrepreneurs to participate in your market, you will cede more tax revenue, jobs, venture capital, and player participation to alternative regulatory frameworks.” This statement serves as a clarion call for regulatory bodies to adapt and innovate in order to retain their positions in the dynamic gambling ecosystem.
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