States Choosing In-Person Sports Betting Registration Are Making A Big Mistake

The repeal of PASPA thrust sports betting legislation onto the desks of state legislators across the country. With so many lawmakers taking a crash course in sports betting, it’s not surprising to see policy missteps. However, some policies, like in-person registration, are more consequential than others.

The fact of the matter is, in-person registration is one of, if not the biggest mistake a state legalizing sports betting can make.

In-person registration, or the Nevada model, has already been adopted in some capacity in several new sports betting states (Rhode Island, Iowa, and Illinois) and is being discussed in many others.

Why In-Person Registration Is a Thing

Stakeholders advocating for in-person registration are simply being protectionist.

It’s not a matter of online betting cannibalizing retail revenue or bringing people to the property. It’s about maintaining the status quo and keeping the same distance between the haves and the have nots.

Advocates for in-person registration would rather see the entire industry take a hit, so long if it means they maintain their position as an alpha in it. The real fear is online gambling, be it sports betting, poker, or casino games, is a great equalizer. It allows every casino, big or small, in a heavily populated or a rural area, the same access to customers.

Rather than compete on equal footing, casinos in heavily populated areas feel they can gain some measure of control when it comes to the online sites people use. They can do this by requiring customers to register in-person. The thinking is, customers within 30 minutes are unlikely to drive several hours to a competitor’s property to register a sports betting account, even if the competitor’s product is slightly superior.

It’s a shortsighted approach.

A customers’ willingness to travel will work against casinos in heavily populated areas too. If a casino in a heavily populated area has the best sports betting site, in-person registration will cancel that out, if customers choose convenience. Unless the product is significantly better, it’s unlikely customers will drive several hours and pass six competitors along the way to register.

Leaves Bettors with a Bad Impression

Another aspect of in-person registration supporters turn a blind eye to is how it will impact customer attitudes towards their brand and the legal industry.

Bettors forced to drive to a casino to register an online account aren’t what you would call “happy customers.” They’re being forced to do something they don’t want to do, and that’s not going to make them giddy about gambling on property or make them suddenly realize how much they love your property and how much they need to keep coming back.

It’s more likely to leave them with a bad taste in their mouths. They had to do something altogether ridiculous (register an online account in-person), and they’re going to blame the state and the stakeholders.

Push Border Populations to Neighbor States

An in-person registration requirement has an even greater impact on people living near the border of states that offer remote registration.

Take New York for example.

If the state legalizes mobile sports betting at its upstate casinos, but requires in-person registration, New York City residents would have the following choices:

  1. Take a four drive to one of the state’s licensed sportsbooks just for the privilege to place bets from the comfort of their home.
  2. Take a 15 minute trip into New Jersey to register an account remotely, and have to take the same short trip to place bets.

Option #2 is even more appealing if the person lives in New York but works in New Jersey.

Conversely, far fewer people would choose Option #2 if they had to drive to Atlantic City to register an account in New Jersey.

And once again, that cuts both ways. Not only will your residents place bets in other states if it’s more convenient, but anyone living on the border in neighboring states without mobile sports betting, or with the same in-person registration requirement is less likely to choose your state’s operators out of convenience.

Bottom line: Convenience is a critical factor when it comes to where someone is going to place bets.

A Gift to the Black Market

Actually, there is a third choice New York bettors can make. They can choose to register an account with a black market, offshore sportsbook.

What advocates for in-person registration are failing to see is they are already in competition with black market online sports betting operators. And will continue to compete with them with or without in-person registration. By pushing for in-person registration they’re increasing the appeal of the black market.

And if they’re disgruntled about having to drive to a casino to open an online sports betting account, the black market is even more appealing.

A Policy That Picks Winners and Losers

Finally, in-person registration is an anti-competitive policy. It’s a state-sanctioned policy that helps pick winners in the market.

In-person registration requirements favor operators in heavily populated areas. It increases their reach while minimizing the reach of smaller, more rural operators.  And by extension, in-person registration ensures that suppliers and platform providers place a premium on partnerships with casinos in heavily populated areas. That creates a competitive imbalance on two fronts.

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