Coopetition – Why the iGaming industry needs an association

Sue Schneider profileBy Sue Schneider

Coopetition! A friend taught me that word years ago and it’s guided my discussions for the need for policy advocacy in our industry ever since. The definition is simple….collaboration between business competitors, in the hope of mutually beneficial results.

I have a history in association work in the gaming industry. In 1996, I co-founded an association for those in the iGaming industry. Called the Interactive Gaming Council (IGC), it functioned from ’96 until just a few years ago when it was disbanded. I had the privilege of serving as the Chair of that trade association (’96-’04) which, at its peak, boasted over 120 member companies from around the world. My company incubated the organization until it moved to Canada and hired staff of its own.

We developed a Code of Conduct as a self-regulatory mechanism in those early days when there was little to no licensing by governments. Much of our work was focused in the US with an emphasis on educating members and staff in Congress in an effort to keep the prohibition bills at bay. This was successful until 2006 when the UIGEA was added on to a “must pass” port security bill.

Unfortunately, today, the iGaming industry really has no voice in the US. Across the pond there is the Remote Gambling Association (RGA) and the European Gaming and Betting Association. In the US, a few years back, the American Gaming Association (AGA) at one time planned to tackle iGaming issues as more of their members adopted plans to add this to their suite of products. But they then thought better of it as they saw an impasse brewing between their members (primarily MGM and Caesars on the pro side versus Wynn and Venetian against it). It was probably a prudent move for association leadership but with the demise of the IGC, it left a void.

There’s not a conference that I attend where folks don’t express concern about the lack of a coherent “voice” for the iGaming industry. But there’s little done to create that voice.

The AGA seems to be in a new era with new leadership on both the staff and board level….folks who are probably much more amenable to advocating for iGaming. I applaud the successful efforts that the AGA has experienced when it’s come to sport betting advocacy. However they still tend to do things more federally based rather than on a state by state basis. Therefore, I would expect them to continue to monitor bills on that level and advocate for the industry there.

Thus, it appears that most of the state level efforts to legalize iGaming typically fall to ad hoc coalitions of suppliers and/or land-based operators whom are active in a particular state, assuming that they agree on the specifics. One need only to look to efforts to pass a poker bill in California to see how awry that effort can go. In that state, there’s been well over a decade of effort to legalize online poker but the ongoing battles between the card rooms, the tracks and the tribal gaming interests have kept it from coming to fruition.

The 2011 Department of Justice Wire Act interpretation opened the door to states offering both lotteries and casino games online. With the recent reversal of that opinion (with a clear connection to Sheldon Adelson who opposes iGaming), we’re now in the same boat in terms of having no clear policy objective and voice for the industry. It was great to see the AGA come out against the new interpretation. And even former New Jersey Senator Ray Lesniak (who was instrumental in persevering in the PASPA lawsuit) has decided to challenge the reversal on behalf of New Jersey.

Frankly, the losers in the Wire Act reversal are primarily the lotteries (particularly the Multi State Lottery which runs Powerball and Megamillions). The lotteries have their own issues when it comes to advocating on behalf of their own interests …. complicated even further by the fact that they’re public entities. This new interpretation may finally bring them together and urge them on.

The lack of a “voice” is most evident when you see anti-gaming Op-Ed pieces in various media outlets. The ability to offset those opinions takes a coordinated PR approach to respond and even to articulate our industry’s positions in the affirmative.

Given the void, it takes some individual action. If your state (or country) is exploring legislation, good or bad, get involved. Write Op-Eds, offer to testify, get your colleagues together and do your own form of competition. Don’t just stand by and watch. Get involved.