Regulation and Innovation in iGaming: Insights from Sue Schneider
The Complexity of Compliance for Startups
As iGaming continues to expand across multiple jurisdictions, compliance has become a significant challenge, especially for startups. Sue highlights the rising costs and administrative burdens of licensing, especially when companies are required to submit separate information to each jurisdiction. She advocates for systems that can streamline this process, such as shared data systems or blockchain solutions, to ease the compliance burden on operators and suppliers. Sue suggests that regulators need to adopt more adaptable systems to meet the needs of modern businesses, noting that the slow pace of regulatory innovation has created a gap between the private sector and government efforts.
The Impact of Rising Regulatory Costs on Innovation
Sue discusses how increasing regulatory and licensing costs are hindering the ability of startups to innovate. She points out that while compliance companies have emerged to help manage these costs, they don't fully solve the issue. Startups are often forced to choose between paying high licensing fees or circumventing regulation altogether. The high cost of entering multiple jurisdictions can be prohibitive, and Sue advocates for more flexible and tiered licensing systems that allow startups to grow without being overwhelmed by regulatory costs.
Challenges for European Companies Entering the U.S. Market
For European companies looking to enter the U.S. market, Sue stresses the importance of thorough research and understanding the complexities of U.S. gaming regulations. She explains that there are multiple avenues for entry, including commercial gaming, lotteries, and tribal gaming. Each route presents its own set of challenges and opportunities, and understanding these nuances is key to success. Sue advises companies to educate themselves on the specific regulatory environments of each jurisdiction they wish to enter, as missteps can lead to wasted time and resources.
Approaching Regulation in Emerging Markets
Sue highlights the growing importance of emerging markets like LATAM and Africa in the iGaming industry. She notes that these markets often operate in a "pre-regulation" state, which presents both risks and opportunities. Companies looking to enter these markets need to be cautious and understand the specific regulatory challenges they may face. For instance, some jurisdictions may disqualify operators who have previously operated in unregulated markets. Sue emphasizes the need for careful consideration when entering new markets, particularly in regions where regulations are still developing.
The Need for a Collaborative Approach to Regulation
Sue advocates for a more collaborative approach between regulators and innovators. Drawing on her experience working with regulators in the past, she believes that a partnership mentality is crucial to creating a regulatory environment that fosters innovation. Regulators need to stay engaged with the industry to understand new developments and technologies, and the industry needs to help educate regulators to ensure that regulations are both effective and flexible. Sue calls for more open communication and collaboration between the two groups to strike a balance between innovation and regulation.
The Impact of Over-Regulation on the Industry
Sue discusses how over-regulation is pushing some players and companies into unregulated markets. She notes that in some cases, the regulatory burden in certain U.S. states has led operators to seek alternatives outside of the legal framework. Sue stresses that while regulation is necessary for player protection, it is important to avoid overburdening the industry, which could drive players and operators away from regulated markets.
The Future of Regulation: Learning and Adaptability
Sue concludes by stressing that regulation is an ongoing learning process. She believes that regulators need to remain adaptable and open to feedback from the industry. This adaptability will be crucial in ensuring that the regulatory environment remains relevant and effective as the industry continues to evolve. Sue calls for ongoing dialogue between the industry and regulators to ensure that the right balance is struck between protecting players and fostering innovation.
