Betting companies hoping to break into the United States’ lucrative sports betting market could face legal challenges if they have ties to Iran — an issue that many believe could affect some of the world’s largest sports betting and gambling companies.
Under new sanctions, companies that do business in the United States are required to end all commercial relationships with Iran before November 4. Companies that fail to cut ties with the Iranian market could face significant legal penalties for breaking international sanctions.
As the United States’ betting market opens up, this presents opportunities — as well as a range of challenges — for international betting companies aiming to start serving players in the United States.
The domestic betting market in the United States is one of the world’s biggest. However, until recently, sports betting has been legally limited to the state of Nevada, preventing many of the country’s largest gambling companies from entering into the market.
A recent Supreme Court decision has overturned this ban on sports betting, potentially allowing people to gamble in states other than Nevada.
The decision is one of several recent Supreme Court decisions that have strengthened states to set their own policy regarding gambling, which has previously been restricted.
While it’s possible for Congress to pass legislation to prevent sports betting in states other than Nevada, the chances are slim. The recent Supreme Court decision is supported by the vast and well funded gaming lobby in the United States and is unlikely to be challenged by Congress.
As the sports betting industry opens up, it’s creating significant opportunities for betting brands both in the United States and internationally. Under the decision, access to the US market isn’t just restricted to American gambling companies, but also available for international players.
Valued at an estimated $150 to $400 billion, the sports betting market in the United States may be the largest in the world. As such, it’s a hugely appealing market for online betting sites, most of which currently do not serve customers located in the United States.
However, the recent Iran sanctions could stop many of the world’s top gaming companies from entering the market. Under the new sanctions, any business that operates in Iran or maintains significant transactions in Iranian rials could face significant legal penalties.
This could potentially be a serious issue for many of the world’s top betting brands. Here’s how:
Well-known gambling industry brand Betcart, which is headquartered in Curacao and part of the large Bcourt Group NV, is one of several major gaming industry brands that could be affected by the sanctions.
The company uses software from SB Tech, a provider of white-label sports betting solutions. As one of the world’s top sports betting software providers, SB Tech does business with a massive range of companies, including major sports betting brands serving the Iranian market.
For Betcart, the link to SB Tech could potentially affect the company’s ability to operate in the United States — after all, the company pays for technology from SB Tech, which offers many of its applications to companies serving Iranian customers.
GAN, another major gaming company that’s listed in the UK, faces a similar legal risk. GAN is part of a strategic partnership with SB Tech — a situation that’s far from uncommon in the highly competitive and specialised betting industry.
While sports betting is largely illegal in Iran, customers in the country use a variety of tactics to avert the restrictive betting laws. Many gamble via Turkmenistan, or use online betting websites in order to bypass regulations and content restrictions.
Betcart, for example, is promoted online in reviews and customer feedback as a “top choice” for players based in Iran.
Could Betcard and GAN miss out on opportunities in the United States as a result of their large networks? As of right now, it’s impossible to tell. However, several other major companies have already made firm legal commitments away from businesses that are based in Iran.
Apple, for example, restricted access to its App Store for businesses and developers that are connected to Iran. The company stated it “cannot host, distribute or do business with apps or developers connected to certain U.S. embargoed countries.”
The Treasury Department has also been firm in its guidance for international businesses, noting that persons and businesses engaging in trade with Iran “should take the steps necessary to wind down those activities by November 4, 2018, to avoid exposure to sanctions or an enforcement action under U.S. law.”
In essence, many of the world’s top betting brands might not have a choice. From terminating or downsizing existing business relationships to outright blocking trade with Iran, the world’s major betting companies might be required to take drastic steps in order to access the US market.
With an estimated market value of $150 to $400 billion, it seems likely that most betting brands will be more than willing to take steps to end trade with Iran in order to enter into the lucrative and fast-growing sports betting industry in the United States.