Andrew Maclean assessing the market in North America and concludes that there is plenty of reason for optimism, particularly for aggregators.
Assessing the market in North America
October 06, 2022

Andrew Maclean, VP of Sales at Pariplay®, surveys the online casino scene in North America and concludes that there is plenty of reason for optimism, particularly for aggregators.

The figures released by Ontario for its first quarter were viewed as slightly disappointing. What can suppliers and operators do (if anything) to help boost the market going forward?

In order for this market to succeed, as is the case with all regulated markets, suppliers need to produce the highest-value entertainment that can be enjoyed by players at licensed operators.
There needs to be a good variety of strong content from leading developers, mixed with regulations around, for example, the right bet levels that are not too aggressive. Most importantly, though, is the provision of entertaining products.
What we have seen in Ontario is that the market has comparatively slim entry requirements. There has been a much larger number of both operators and providers entering this new regulated market as a result. It has been perceived as a quicker and cheaper market to get into, within the overall context of North America.
We believe it is a very positive step that a Canadian regulator has taken the step of introducing a market that starts with a clean slate, rather than the previous situation in which you had state lotteries alongside an unregulated .com market.
As an aggregator that went live from day one, we have an important role in providing rich and varied content, which will hopefully see the post-Q1 results start to improve.

Looking at the US, what is stopping the regulation of online casino when compared to sports betting? Do you see this changing in the near future?

Everyone is aware that while we see states opening up on a regular basis for sports betting, the process has been slower for online casino. I believe that a major cause of this dynamic is that there is a cultural aspect at play, whereby state regulators feel more comfortable in opening up and managing sports betting.
Online casino can still be perceived as being too close to notions of ‘gambling’, is as opposed to sports betting, which already finds itself as a fully integrated part of the US entertainment sector. Regarding future changes, it is difficult to speculate too much as things can change very quickly. However, it is a situation we are watching very closely.
The current six states in the US that have regulated provide excellent opportunities for us as both a studio and an aggregator and we are very happy with our progress to date. Should other states open up, then Pariplay® has a clear intention to enter those markets too as quickly as possible. Whether it be New York, California or some of the smaller states, our compliance team is keeping its ear to the ground and provides us with regular updates of any developments.

Which states have got it right so far when it comes to the regulation of iGaming?

What we have found is that all state regulators we have been involved with have laid out very healthy state entry requirements. That is not to suggest it isn’t tough to go live in these markets –there are a lot of requirements to be worked through –but they have done a very good job-and if you look at the key industry players and their employees, we see a very healthy and honest mix of operators and suppliers driven by this regulation.

Pennsylvania has a very high tax rate compared to other states, at around 52%, which does bring with it challenges when it comes to commercial revenues, but it does affect all operators and suppliers in the same way.

Though the high level of entry requirements brings challenges, at Pariplay® we have been able to navigate those successfully. We have a strong and well-run compliance department, and this is essential in order to be able to go into these states.
I also think that compared to some regulated European markets, where there is a perception that players are being punished through certain restrictions placed on their activities, in the US the requirements are more focused on protecting players and establishing a safe entertainment environment.

What special opportunities / advantages does being an aggregator bring to the table in North America?

As an aggregator, Pariplay® has the benefit of possessing a broad understanding of the wider market and player trends. It is important to realize that these trends differ widely between various states, so they have to be considered as distinct entities when planning content strategy and games roll-out.
In the same way you would treat Germany as being vastly different to the UK, each state has different appetites that we need to respond to. You quickly get an idea of what works best for a certain set of players and our mission is to help support and grow our B2C customers by making sure they have the best premium products from a wide range of third-party providers.
There is definitely less competition at the moment across North America, compared to established European markets, so there is a strong need for more content that provides entertainment. As an aggregator and a game development company through our Ignite® programme, this dual focus has helped us in North America because we can supply not only the familiar tier-one studios but also new and exclusive content from very strong emerging development teams we are working closely with.
A key factor for aggregators is to bring unique content to players in North America. When smaller, more agile studios are able to focus wholly on content, leaving certification, RGS and technical platform necessities to an aggregator, it can help produce content that is innovative, exciting and relevant.

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