“Just because you don’t understand something doesn’t mean it is nonsense.” – Lemony Snicket, pen name of bestselling author, Daniel Handler.
There is a misconception about gaming in America, especially in the era of mobile wagering. This myth is often referenced by international companies looking to introduce their products to the American market. However, the idea of a unified “US gaming market” is more of a misunderstanding than a myth. In reality, gaming in the US is governed by state laws and regulations, resulting in multiple gaming jurisdictions.
Each jurisdiction that permits gambling takes its own approach to authorization. This means that there are as many US gaming markets as there are legislatures or tribes that have decided to allow gaming activities. The reasons behind this decision can vary, such as generating tax revenue, creating jobs, boosting tourism, stimulating economic development, preventing money from flowing to neighboring states, funding specific initiatives, and more.
These policy goals shape the legislation and regulations for each state. While gaming jurisdictions may adopt similar regulatory concepts, there are always variations, ranging from subtle nuances to significant differences. As a result, each state has its own unique gaming market, and companies must navigate these individual jurisdictions to conduct business.
For foreign gaming companies, this patchwork of regulations can be challenging and costly as they need to understand and comply with different licensing, operational, compliance, and enforcement requirements for each jurisdiction they wish to operate in. The US regulatory scheme places emphasis on suitability, which may not be fully understood by companies from jurisdictions with different historical contexts. While it may seem logical to have reciprocity for licensing determinations across state lines, the lack of uniformity in licensing criteria prevents blanket reciprocity.
Despite these challenges, states do work together to some extent, sharing background investigation materials and accepting another state’s approval as a starting point for their own investigations. However, each jurisdiction maintains its own responsibility for the final licensing decision.
In addition to licensing, there is a lack of uniformity regarding hardware location, testing standards, renewal schedules, reporting, internal controls, audit requirements, and various other factors. While this duplicative and expensive system may be frustrating for the industry, it is the current reality in the US and is unlikely to change in the near future.
Instead of resisting or questioning the way the US market functions, companies must establish strong regulatory relationships and seek accommodation where possible. They must recognize and accept that compliance with the rules of each jurisdiction is necessary to thrive in the US gaming industry.
Susan Hensel is the co-founder of Hensel Grad P.C., a boutique law firm specializing in gaming clients. She has been recognized as one of the ten most influential women in iGaming by InnovateChange in 2020. Susan brings extensive experience as the former director of licensing for the Pennsylvania Gaming Control Board and the former president of the International Association of Gaming Regulators.
Disclaimer: All opinions expressed are solely those of Susan Hensel.
