As the US embarks on a third year in the post-Murphy v. NCAA world, the state of legal wagering on sporting events in North America presents some challenges along with opportunities for countries outside the continent. Luckbox is one such company.
Luckbox is an eSports-centric online wagering platform is based on the Isle of Mann. Expanding operations in Canada and the United States could be among its next moves but it sees parts of the regulated industry in both counties as obstacles.
Luckbox perceives regulatory hurdles north of the border
Currently, Luckbox accepts wagers in Canada but not the US. Luckbox CEO Quentin Martin explained that Canada’s regulatory structure allows international companies to take wagers under certain licenses.
While such registration allows Luckbox to post betting markets legally in Canada, that license bars Luckbox from advertising its products. Martin counts that among changes he would like to see.
“Whenever a country moves toward better regulation, I find it’s always better for the industry,” Martin said. “If they go too far on that, however, they push people to the dodgier license bases like Curacao. I think it will benefit eSports because it will legitimize our industry. Esports enterprises in Canada could have gambling sponsors. We would gain access to more customers as a result. It’s a mutually beneficial setup.”
There has been recent momentum toward a shift in Canada. A bill in Parliament would have legalized single-event wagering. That could have opened the door for Luckbox to acquire a domestic license and as a result, start spending on marketing in Canada.
The deadline to enact that bill, however, was June 17. Despite its failure, there is still reason for optimism. Commissioners from MLB, MLS, the NBA, the NFL, and the NHL all penned a letter calling upon Parliament to legalize single-event wagering.
Whether Parliament will consider another similar measure in its next term remains to be seen. Canada isn’t the only place where Martin would like to see regulatory reform, however.
Patchwork regulations, eSports ignorance in the United States
As it is for several other online gambling companies both domestic and international, the Federal Wire Act of 1961 is a challenge for Luckbox. The biggest reason is the lack of uniform regulations when it comes to eSports wagering.
For example, Colorado‘s regulatory structure has been welcoming to eSports in its short lifespan. On the other hand, the Iowa Racing and Gaming Commission just ruled that betting on eSports does not fit within the scope of current laws in the state.
The patchwork regulatory structure presents more of an issue than just the differing statutes on eSports wagering, however. Martin says some jurisdictions aren’t worth investing in right now.
“Honestly, it’s just the bigger states and the ones that are more accommodating,” Martin stated. “There are many states where it’s too complicated, too expensive, the population is too small, so we’d start with New Jersey. We like Colorado. It amazes me that some states have decided to treat eSports as different from traditional sports. That just boggles my mind. It shows a complete lack of understanding as to what eSports are.”
Earlier this month, Martin shared that Luckbox has seen a 500% uptick in global wagering since March. While the suspension of traditional sports is largely responsible for that growth rate and it should slow once traditional sports resume, Martin believes there’s still reason to believe eSports betting is the future.
“My favorite stat is that 18-to-25-year-olds watch more eSports than traditional sports,” Martin explained. “It’s indicative of the long term growth of eSports versus traditional sports. I’ll take a bet with anyone that in my lifetime, eSports will be bigger than traditional sports by any metric except for historical stuff.”
Luckbox has a possible path forward into North America
So how does a company like Luckbox overcome regulatory hurdles to expand its offering into North America? Luckbox has an interesting option.
“One of our strategies is that the big companies are focused on their existing customers,” Martin commented. “They have limited resources and it doesn’t make sense for them to allocate those away from basketball and football. They don’t have the expertise and resources to focus on eSports, but we do. Because they have the brand, the licenses, and the traffic, that’s the likeliest way we enter the US.”
If Luckbox does go that route, it would be just the newest United Kingdom-based company that acts as a vendor for US sportsbooks. Among others are Kambi and Sportradar. FanDuel’s parent company, Flutter, is also based in the UK.
North of the border, Luckbox has already taken action. It just completed a funding round to go public on the Toronto Stock Exchange. That move increased the company’s already existing ties to Canada.
“The majority of our investor base is North American,” Martin elaborated. “Most of that is Canadian but some from the United States as well. That includes Luis Robles, the Inter Miami captain and keeper. He’s one of our shareholders.”
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Necessary shifts for the future in both countries
In Martin’s opinion, opening up Canada and the United States for better and more regulated betting on eSports is a necessary move for everyone involved to stay relevant. It’s also a crucial component of the struggle to shift handle away from the “black market.”
“We are keenly monitoring the US and want to be in the US, licensed and legitimate, at some point,” Martin said. “The regulatory scheme in the US unfortunately still massively encourages illegal, offshore gambling. We’re testing the waters and trying to find the right way to get in that is feasible. I very much hope that we’re a major US-facing brand for eSports wagering someday.”
“Esports isn’t going to increase revenue from older bettors for sportsbooks. The value in eSports is bringing more younger bettors to your platform. Those people aren’t that rich yet but it’s a long-term play. You want to get those bettors and retain them so that in five years’ time, ten years’ time, they’re big, consistent bettors.”
Esports wagering, or the lack thereof, will shape the future of legal betting in North America. The decisions that government officials, operators, and regulators in both countries make now will determine whether that future is better than the status quo.