GOODBYE 2019...
Daniel Kornitzer Chief Business Development Officer, Paysafe
a decline. Faced with a decline, players commonly favour alternative payment methods: with over a third (35%) using a digital wallet and more than a fifth (22%) an eCash product such as our paysafecard solution. Given player and, by extension,
operator demand for more choice, we brought to market in Q1 our iGaming payments platform, providing a comprehensive suite of Paysafe products through one single point of integration. The platform combines our card payment processing with alternative payment methods like the Skrill digital wallet and paysafecard as well as instant ACH.
What are you most excited about for yourselves in 2020?
What was the most important occurrence for you in 2019?
There were two interconnected developments in 2019 – first, for the wider gaming industry, and, second, for Paysafe – that strike me as important. At an industry level, the regulatory evolution of the US sports-betting market has really gained traction this year. States as diverse as Illinois, Indiana, Iowa, Montana, New Hampshire, North Carolina, and Tennessee, have regulated the vertical, with Michigan likely to enact legislation imminently. Revenue growth has also been
impressive. Online sports-betting revenue for New Jersey, the cornerstone of the vertical in the US, increased 361% year-over-year in October to hit an unprecedented $38.7m, according to the state’s Division for Gaming Enforcement (DGE). Of course, the wider US market is still negotiating significant challenges, including from a payments perspective. Despite progress with the issue of card declines from the top US issuers of VISA and Mastercard, our Q1 2019 research revealed that close to a fifth (19%) of American sports bettors have experienced
114 JANUARY 2020 GIO
As mentioned, the issue of credit and debit card declines in the US iGaming market remains a significant challenge. However, we shouldn’t downplay the progress made since the repeal of the federal ban on single-event sports betting in May 2018, and over the course of 2019 in particular. In 2020, we’re looking forward to
continuing to work collaboratively with banks, card issuers and networks to challenge the perception of gaming’s high-risk nature and reduce declines. When combined with the ongoing regulatory momentum at a state level, we hope that such collaboration will soon serve to make a deposit with a gaming brand by card a transaction like any other. That said, even as card declines
continue to improve over 2020, alternative payment methods will still have a place, especially for certain player demographics – those favouring cash, for instance. Our Q1 research revealed that 55% of potential bettors would prefer cash to cards when wagering online if it was easier to do so. We’re therefore looking to expand
the presence of our alternative payment products and partner brands in the US market, including paysafecard and the Skrill USA digital wallet, which operates in partnership with Paysafe. As the frontier of regulated gaming in the US continues to expand in 2020, these products and our iGaming platform will see ever more demand.
What are you looking forward to for the iGaming sector in 2020?
Once again, the US market will be an important focus for the global gaming industry. At a state level, the sports-betting market is likely to continue to evolve relatively rapidly over the next year. Aside from Michigan, the American Gaming Association (AGA) is forecasting that Connecticut, Ohio, Oklahoma, Maine, Maryland, and Massachusetts, could all legislate the vertical in some form by end-2020.
The distinction ‘in some form’ is an
important one, as regulation spans brick-and-mortar sportsbooks as well as online and mobile wagering. New York, one of the most populous US states with close to 20 million residents, allows sports-betting at four commercial and three tribal upstate land-based casinos, but its legislation doesn’t extend beyond these properties or into the online space. It will be interesting to see if the Empire State introduces new legislation allowing residents of America’s biggest city to wager wherever and whenever they have a mobile device to hand. Of course, New York state is just
one example of the retail-online sportsbook dichotomy. Like the Empire State, North Carolina, which enacted sports betting legislation in July, permits wagering at just two land-based tribal casinos with no provision for online or mobile betting. Hopefully, the momentum of new states regulating in 2020 is going to galvanize such states to expand the scope of their legislation. This would make sense, given the online and, more recently, mobile shift we’ve seen in mature gaming markets like the UK. Talking of mobile, the launch of
Washington D.C.’s sports-betting market in 2020 would be a fascinating prospect. With no land-based casinos in the district, wagering in the market will be inherently mobile if the current legal challenge to the bill passed in 2018 is overcome. More broadly, with Morgan Stanley
predicting that the US sports-betting market will generate $7bn in revenue by 2025, the future looks bright. And the next 12 months will be no exception.
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