Jul 6, 2022

PandaScore: Educating regulators is key to US esports betting growth

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Originally published by Connor Porter in SBC Americas.

Ahead of next week’s SBC Summit North America, Oliver Niner, Head of Sales at PandaScore, delves into the current state of esports betting in the US and how the industry itself can help address the concerns regulators may have.

SBC: What is the current state of play when it comes to esports betting in the US market?

Oliver Niner: “It is still very early days for esports betting in the US, and the regulations in place differ from state to state. Right now, there is not a lot of direct legislation in place but that is changing with new states embracing legal sports betting, often including provisions for esports betting in their frameworks and requirements.

“New Jersey has also recently gone back to its regulations to add provisions for esports betting as this was not included the first time around, and I expect to see more of the early sports betting states do the same thing. This is because operators want to offer esports betting to their players, so regulators have to ensure it is included in their frameworks and requirements.

“Most regulated states are fairly open when it comes to esports betting, but a few have put restrictions on things like bet size and not being able to offer markets and odds on tournaments where participants are under the age of 21. In short, esports betting will align with the roll-out of legal sports betting across the US.”

SBC: What concerns are regulators raising when it comes to esports betting?

Niner: “The greatest concern is the appeal and popularity of esports among younger audiences and certainly people that are under the legal age to gamble. Regulators are particularly concerned about how esports betting is marketed to players and ensuring that those under the legal age to gamble are not encouraged to do so. This also extends to the age of tournament participants, as again professional esports players are often under the age of 21.

“To ease these concerns, regulators can impose measures that require operators to verify the age of participants and ban them from offering markets and odds on games where participants are under the legal age to gamble.

“State regulators are also on top of match-fixing and collusion, as they are for traditional sports. Data is another concern and especially where it comes from and accurately verifying information – esports is very different to traditional sports when it comes to data.”

SBC: Where are these concerns coming from?

Niner: “I think regulators are fearful of esports and esports betting because they believe they do not understand it, and therefore how to regulate it. There have also been a couple of cases where big-name operators have been sued over inaccurate data. In a country that is highly litigious, this is a major cause for concern among lawmakers.

“When you bring these factors together – fear, high-level precedence when it comes to legal issues, and a lack of knowledge – it is easy to see why some regulators are reluctant to embrace esports betting. Of course, that should not be the case – esports betting can be easily and effectively regulated in the same way that sports betting and online casino can be.”

SBC: How can the industry educate regulators when it comes to esports betting?

Niner: “The industry needs to be able to show US regulators what a good esports and esports betting product/offering looks like. Of course, we have a strong precedent in other markets where esports betting has been successfully regulated for a number of years now.

“An education process also needs to be undertaken, especially when it comes to how data is provisioned, how lines work, and how operators can launch and run successful esportsbooks.

“It is clear that regulations will be rolled out on a state-by-state basis, so it is important for stakeholders to work with individual regulators to help them understand esports betting and create frameworks that align with wider gaming regulations in respective states.”

SBC: Is esports betting any different from standard sports betting when it comes to protecting players? If so, how?

Niner: “The fundamentals of sports betting and esports betting are the same, and so too is the way in which both activities can and should be regulated. But this is not necessarily what we are seeing in some US states.

“In particular, there seems to be concern around permitting online and mobile esports betting, with the activity potentially being limited to retail books. This would be a mistake as ultimately it would push players to unlicensed online/mobile sportsbooks where responsible gambling measures may not be in place.

“Again, I think this is coming about due to fear over a lack of understanding of how esports betting works. Once regulators are educated and up to speed, they will have the confidence to regulate esports betting and sports betting in the same way.”

SBC: What is the risk of not including esports betting within online sports betting regulations?

Niner: “It is being included, so I don’t think there is a risk of it not happening. That being said, we still need to ensure that esports betting is part of wider conversations about legalizing online sports betting, and that any regulatory requirements put in place are sensible and proportionate.”

SBC: What opportunities does regulating esports betting open up?

Niner: “It opens up one of the largest, untapped gambling markets on the planet. There is a huge demand for esports betting and operators know this and want to be able to offer it to their players. We just need to ensure that it is effectively regulated and that players are protected.

“For operators, they must also offer players a seamless product and experience, with reputable pricing that provides true value. Those that can offer this will be able to capture the largest share of the market.”

SBC: Anything else to add?

Niner: “PandaScore is at the cutting edge of esports odds and data and will be attending the SBC Summit North America, where we will be showcasing our suite of products and services.

“If you want to check out what we offer, or just want to chat about esports, make sure to reach out to me at oliver@pandascore.co.”