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PASPA Q & A
Q. What is PASPA?
- PAPSA stands for “Professional and Amateur Sports Protection Act” of 1992, a federal statute that states in part:
- It is unlawful for a state or state-owned entity to “sponsor, operate, advertise, promote…a lottery, sweepstakes or other betting, gambling, or wagering scheme based on…one or more competitive games in which amateur or professional athletes participate and moreover bans states from licensing or authorizing by law or compact” any such gambling activities.
- Oregon, Montana, Delaware and Nevada are exempt from PASPA.
- The Supreme Court of the United States (SCOTUS) reviewed PASPA as a result of a case filed by the State of New Jersey, which challenged the constitutionality of the statute.
Q. What does the PASPA decision mean for U.S. sports betting?
- The ability for states to legalize sports betting on professional and amateur sports in the U.S. opens up new opportunity for our customers across the gaming and lottery sides of the business.
- The decision provides an opportunity to expand the gambling market into a new sector that has potential to draw in new providers and players.
- Nine states already haveauthorized sports betting legislation: Delaware, Mississippi, Montana, Nevada, New Jersey, New York, Oregon, Pennsylvania and West Virginia.
- 15 States have introduced or contemplated legislation in 2018 for legalized sports betting: California, Connecticut, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Oklahoma, Rhode Island and South Carolina.
Q. What is the market potential?
According to research from Oxford Economics, commissioned by the American Gaming Association, legalized sports betting in the United States could generate between:
- $65 billion and $332 billion in handle (or amount bet)
- $4.2 billion and $19.6 billion in gross gaming revenue
- $2.3 billion and $8.4 billion in total tax impact (direct, indirect and induced)
Note: These are national numbers.
Q. What is the implementation timeline – when will consumers be able to start placing bets?
- We stand ready to assist partners in going live with our OpenBet product suite.
- Our goal is to have operators live as soon as possible, contingent on regulation timelines.
- It will vary by state and the status of their legislation and preparedness.
Q. How will Scientific Games be involved in Sports Betting and where?
- Our company will leverage our significant presence throughout the U.S. to provide operators with OpenBet, a global leading sports platform solution, and our secure, integrated gaming and lottery systems technology.
- We are actively involved in discussing our sports betting solutions with innovative and first adaptor customers in major regulated markets and in important markets that are finalizing their legislation.
- In states where the state lottery may manage sports betting, SG Lottery will be ready to launch our omni-channel sports betting system to provide a secure, integrated retail and online sports betting experience, as we already provide this in Delaware and several European countries. SG Lottery currently has sports betting contracts with more than 20 lottery customers globally, to provide technology, content and/or services.
- Our goal is to empower both our gaming and lottery customers to be ready to take advantage of this amazing opportunity to gain market share in a newly regulated sports betting segment.
Q. How will Scientific Games’ OpenBet solution help gaming and lottery organizations capitalize on sports betting in the U.S.?
- OpenBet is a global leader and pioneer of online sports betting. The solution offers a turnkey software sports platform solution that makes installation smooth and simple.
- OpenBet has massive power and proven success processing tens of millions of bets in a single day.
Q. How do gaming companies currently handle issues in gaming that are similar to game integrity issues?
- The existing gaming regulatory environment in each of the states is well suited to handle sports betting. Many of the safeguards that are being discussed are already addressed in the states, including consumer protection, process for resolving player disputes, responsible gaming and reporting of illegal or fraudulent acts.
Q. Will the US market entry change the focus on product for SG?
- No. Scientific Games has dedicated product teams managing its broad portfolio. If anything, this will bring a new era of growth for the SG Digital division, with specific focus on the OpenBet product suite.
Q. What will the differences be for product based in the UK vs. the U.S.?
- The UK gaming and sports betting landscape is more mature than that of the U.S., but the core idea remains the same: players want a fun, simple sports betting process.
- In the U.S., we expect to see that sports betting product will be heavily influenced by existing casino operators. Sports betting will start as an experience and gradually move through the online space until it becomes more pervasive.
Q. What are the key areas Operators should focus on?
- Operators should focus on keeping their existing technology up-to-date so that when the time comes to install a sportsbook, the footprint is low and the speed-to-market is high.
- Operators should also focus on seamlessly integrating their content, so sports betting is easily accessible to their player-base with a small learning curve.
Q. Does state-by-state approval work or would it be better with uniform federal oversight.
- States have successfully managed the gaming industry for decades and have the regulatory infrastructure in place.
Q. Who will operate legal sports betting?
- Depending on a State’s regulations, legal sports betting can be offered at retail or online. We’re positioned to help customers deliver a platform that power land-based venues and digital solutions.
- Our unique OpenBet technology and depth and breadth of customer relations uniquely enables us to provide one-stop shop for casino, lottery, iGaming and sportsbook providers around the globe.
Q. What will the cost be to the consumer – taxes, fees, etc.?
- As with any other type of legalized gaming, all players will be subject to state and federal taxes, where applicable.
Q. Are there data security concerns related to sports betting?
- Scientific Games is renowned worldwide for our continuous commitment to providing secure, trusted technology that meets all regulatory requirements and protects game data, our customers and importantly, the players.
- Our best practices for security are unparalleled in the lottery industry. Scientific Games was one of the first lottery suppliers to be certified by the World Lottery Association for security, and we hold several certifications from the International Standards Organization (ISO) for Information Security Management Systems and Quality Management. Additionally, our games, systems and retail terminals have dozens of North American and international certifications, including Underwriters Laboratories, Federal Communications Commission, International Electrotechnical Commission, and Gaming Laboratories international.
Q. What are the next steps for operators interested in offering sports betting?
- They should contact their Scientific Games Account Representative, who will partner with the customer to discuss the best sports betting solutions to fit their needs.
Q. Is there concern about too much competition for the consumer’s gaming entertainment dollar?
- Gaming channels are merging, and that’s been happening for quite some time. Technology has enabled this with mobile and internet, but the bottom line is people love games and they’ll continue to choose the gaming products they prefer to play just as they always have – whether it’s a lottery instant “scratch” game, a casino slots game, or a lottery numbers game. Adding sports just gives them another option for gaming entertainment.
Q. Are lotteries positioned to regulate the sports betting channel in their state?
- Yes, and Scientific Games fully supports lotteries regulating sports betting in their state – including retail, internet and mobile channels. In fact, we currently have more than 20 lottery customers worldwide that manage a sports betting channel in their jurisdiction.
- Globally, 70 percent of legal sports betting is regulated by lotteries. Approximately 60 countries allow legal sports betting, and 9 of the top 10 sell wagers through lotteries.
- Lotteries, by nature of the business, are already offering responsible gaming entertainment to players that maximizes state profits. Maximizing returns to the state is the mission of a state lottery.
- Scientific Games conduct extensive consumer research so that we can help create product offerings for our lottery customers. The lotteries do quite a bit of research on their players too, because every jurisdiction is unique. So they will already have a deep understanding of their consumers and can effectively market a sports offering.
Q. Will sports betting in the U.S. create responsible gaming problems?
- Scientific Games takes responsible gaming very seriously. Responsible gaming is an important pillar of our corporate social responsibility, and we are contributing our knowledge, expertise and financial support to research, education and programs for problem gaming. We believe it is our responsibility to protect players and to make a difference.
- Beyond participation with responsible gaming organizations and initiatives, we are leading the gaming industry’s way with technology that proactively monitors player behavior in land-based casino, internet and mobile channels to protect players and ensure applicable gaming regulations are upheld. This would be no different in the sports channel.
We are also one of the first and few companies certified as a Responsible Gaming Supplier by the World Lottery Association.