Don´t price yourselves out of the market, Pennsylvania
News on 4 Jul 2016
News on 4 Jul 2016
With the legalisation of online gambling a definite possibility (see previous reports), an industry exec has warned state lawmakers not to expect an immediate surge of tax revenue, and against making Pennsylvania too costly to encourage operators.
Matthew Katz, the chief executive of industry services suppliers CAMS and Verifi told the publication Players Advantage over the weekend that political expectations of an immediate surge in revenue are not realistic.
“The reality is, it takes time,” he said. “It’s not all of sudden you go live and everybody comes and plays. It takes time to educate the marketplace.”
Nevertheless, expectations are high, bearing in mind that Pennsylvania already generates more gambling revenue than any other state except Nevada.
Katz believes that associating online gambling with daily fantasy sports in the Pennsylvanian bill was a brilliant idea, improving its chances of legalisation, but he cautioned that imposing too high costs on operators and their suppliers could have a discouraging effect on applicants for Pennsylvanian licensing.
“We want to come into Pennsylvania, but if the costs are going to be similar to that of New Jersey, we would probably have to make the decision not to,” he says.
He revealed that CAMS paid about $350,000 to be licensed in New Jersey, compared with $50,000 in Nevada. Covering the New Jersey cost will take “years and years and years,” he said, advising politicians to set reasonable and realistic targets and understand the costs of setting up operations.
He pointed out that an online operator could have a dozen or more vendors providing services such as content, payment processing, customer identification and loyalty programs and geolocation to ensure that gamblers are in the state.
“As every state legalizes online gambling, they’ve got to be really concerned about the process they create and how expensive it is. Will it actually disincentivize operators?” Katz said.
“I’m hoping they create a balanced set of rules and regulations that not only protect the customers and the integrity of the industry but really make it desirable for operators to invest.”
