With the opening of the US sports betting market, a growing number of international companies are looking at breaking into the United States.
However, many face a unique challenge — as well as the intense competition from US-based gambling companies, some of the world’s top online bookmakers could face restrictions due to their existing business relationships with Iran.
As the US prepares to intensify its sanctions on Iran this November, online betting companies that serve customers in Iran, work with Iranian partner businesses or simply use technologies operated by companies that serve Iran could face legal penalties and restrictions.
It’s a significant challenge, and one that could affect a wide range of online companies. But it’s one that many businesses, in order to access the vast and lucrative US sports betting market, will likely need to deal with.
The United States is currently in the process of opening up its sports betting industry. Under a new US Supreme Court decision, the existing ban on sports betting — which exempted only the State of Nevada — is no more, with states free to regulate their betting industries independently.
It’s a significant shift towards the rights of individual states, and one that will likely have major implications for the US sports betting industry.
While Congress could still block state-based gambling regulations, the likelihood is slim. With the vast majority of US gaming companies backing the Supreme Court decision and lobbyists unlikely to challenge, the sports betting market is likely to open up.
For US-based bookies, it’s a major opportunity. It’s also a huge potential win for international gambling companies, as the new court decision not only allows for US-based gaming firms to market to US customers, but also for international players to enter the industry.
The American sports betting market, much of which was until recently illegal, has been valued between $150 and $400 billion. For international betting giants, the US market is potentially the largest in the world, beating even the most lucrative current domestic betting industries.
After decades of focusing on alternative markets, international betting companies have a great opportunity to expand into the world’s largest economy.
Unfortunately, this is where the recent Iranian sanctions enter into the picture. With many of the world’s biggest international betting providers serving a diverse range of countries, the sanctions preventing trade with Iran could be a barrier for entering the US sports betting market.
Under the new sanctions, businesses that trade with Iran could face significant penalties if they continue to do so after November. The financial penalties for sanction busting are significant, in addition to the risk of further legal action that prevents expansion into the USA.
For international gambling and sports betting giants, that’s not a pretty picture. And while many betting companies don’t directly operate in Iran, others have relationships and partnerships with contractors, technology providers and other businesses that serve the Iranian market.
While online gambling and sports betting is technically illegal in Iran (at least, outside of several very specific and limited situations), Iranian players can access online betting websites through several mediums.
One common method is to access websites hosted outside of Iran. A second is to bet through the country of Turkmenistan. Many of the world’s top gaming companies are marketed towards Iranian gamblers, often via online reviews.
UK listed gaming company GAN, for example, is one of several major betting industry brands that could be affected by the sanctions. The company is currently involved in a partnership with SB Tech, a leading provider of betting industry software and technology.
Like many other technology companies, SB Tech supplies companies in the betting industry in Iran. While this relationship might seem minor, it could have significant consequences if GAN aims to break into the US sports betting market.
Betcart, which is based in Curacao, is another major online betting brand with links to SB Tech. SB Tech currently supplies the technology used on several of Betcart’s domains, liking it to the Islamic Republic of Iran indirectly through its relationship with the company.
Like other gambling providers, Betcart is an attractive option for Iranian players, marketed as a “top choice” for betting in Iran on bookmaker comparison and review websites.
For these companies, it will soon be necessary to make a choice between continuing to operate as they currently do, with access — often indirectly — to the small Iranian market, or to switch to an alternative range of business processes to avoid any links to Iran.
Companies in other industries have already made their decisions, with Apple long ago choosing to impose a blanket ban on all hosting, distribution or other business relationships with apps and developers connected to Iran, as well as other embargoed countries.
With access to a $150 to $400 billion market at stake, this bet is an easy one — the majority of bookmakers, or at least those interested in expanding into the United States, are likely to make major changes in order to avoid sanction busting penalties and legally access the US market.