How technology can give you the leading edge in the U.S. iGaming market
The evolution of technology has been mushrooming rapidly over the years. Ironically, the better each innovation gets, the cheaper it becomes.
iGaming has existed for about 25 years, more or less since the internet became readily available to the masses. Malta issued its very first iGaming license back in 2001 when the necessary tech had to be located in approved data centers in Malta and all servers had to be sealed. A similar “old-school” scenario can now be seen in various parts of America. However, the sheer acceleration of online gaming regulation in the U.S. is proving to be unprecedented, as it recognizes its enormous commercial value, and seeks to catch up with the rest of the iGaming world.
Considered by most to soon become the planet’s leading online gambling hotspot, the USA is the focal point of most industry players these days. But with great opportunities come great challenges. As the online gaming boom spreads across the U.S., the relative regulations are still somewhat rigid and complex, or in the “teething stages”. In this article, we will focus on how to overcome a number of foreseeable complexities through the use of technological strategy – keywords for anybody looking to enter the market.
Primarily due to the “Interstate Wire Act”, the American gaming market is “geofenced” and regulated differently in every state, meaning that each one must be approached as though it were an individual country. Like in Malta 20 years ago, some states require all servers to be sealed as well as located in a data center that has been officially approved. The most sensible way of operating and scaling up one’s technology is such a complex market is by outsourcing to a licensed hosting provider. This permits considerable savings of time and also manpower.
Each state can choose how to manage its unique licensing requirements, but for the most part, they are split into three distinct categories: Operators, who deal with odds, stakes, and pay-outs, with access to all service-related issues; Suppliers, who have access to a limited amount of data and supply software or hardware; and Vendors, offering goods and various services to both operators and service providers. It is to be expected that licensing approval can be a lengthy and cumbersome process.
The invalidation of the Privacy Shield (Schrems II) is another factor to bear in mind. For any company operating in markets outside of the U.S., it is highly advisable to choose a European hosting provider in order to avoid a variety of legal complications. This is largely due to the incompatibility between the U.S. Cloud Act as opposed to the European GDPR, a discrepancy that is unlikely to change in the near future.
As America quickly moves towards nationwide regulation, there is an equally rapid move towards cloud hosting. The upsides of this are of fundamental importance, including improved security, increased redundancy, a decrease in cost, lower latency, and the benefit of being able to quickly scale up or down, according to one’s requirements. In other words, cloud hosting can remove multiple infrastructural pain points from one’s business. This doesn’t mean that a company can simply move to Google cloud or AWS and easily get set up in a major European hub – for various reasons, this is not possible, such as U.S. regulations, Tax motives, and the Cloud Act. And so, the question remains: how can your business gain a competitive edge through technology.
Here are the most critical points to consider as a basic guideline
- To reduce the overheads and complexity of scaling, reduce to a minimum the number of providers you deal with
- Use cloud services wherever available and outsource to a hosting provider
- So as to offer cloud services in the applicable states, make 100% sure that your chosen provider has the required local license tier
- Given the invalidation of the Privacy Shield, choose a European or non-U.S. hosting provider
- As far as possible, to avoid repeating the process for each state you wish to enter, automate the setup of your infrastructure
- To support the automation process, make sure that your provider offers complete access to infrastructure APIs
- Make sure that you are guaranteed maximum scaling flexibility
- Choose a supplier with which you can have a solid business relationship and communicate freely and regularly
As a premium supplier of iGaming hosting, we have many years of experience in bespoke cloud hosting services, with hubs in most regulated jurisdictions around the world. We are active in several states in the U.S. and will soon be offering our suite of services in all compliant states across the country. Furthermore, we offer consultation on the sourcing of equipment as well as all requirements and licensing.
Count on us to take you to the stars and stripes, and beyond