Online betting companies that do business with Iran could face restrictions if they attempt to enter the US gaming market, with new Iran-targeted sanctions threatening companies trading with the country.
Starting from November 4, companies that do business with Iranian customer, or maintain an account balance in Iranian rials, could face legal penalties for sanction busting.
This is of particular interest for international bookies and gambling companies. With the recent US Supreme Court ruling overturning a ban on sports betting by companies based outside of Nevada, many international gaming businesses are eyeing an entry into the United States.
The Supreme Court decision reverses a lengthy ban on sports betting outside Nevada. Until recently, Nevada was the only state that allowed legal betting on sports. The court decision is likely to pave the way for a rush of new companies into the US online betting market.
Interestingly, the decision not only opens up the US sports betting market to companies based outside of Nevada but in the United States — it also allows for international betting providers to enter the extremely lucrative US betting market.
Currently, the decision allows states to set their own betting regulations independently from the federal government. Despite the possibility of Congress electing to prevent the ruling through a specific piece of legislation, most gaming industry analysts are confident the market will open.
Part of this is due to the influence of large, well-funded betting lobbying groups in the United States, many of which are financed by the gaming industry. US-based gambling and betting companies overwhelmingly support the Supreme Court decision.
The ruling also creates a legal opportunity for established betting companies to capitalize on huge demand for sports betting in the United States. As of 2018, the illegal betting market is valued at approximately $150 to $400 billion in the United States alone.
With the United States blocked off to international betting companies, most have focused on other markets. However, international markets such as the UK are dwarfed by the amounts spent on sports betting in the United States that’s now accessible to these companies.
Currently, analysts believe that the US gaming market is worth approximately $70 billion, with gaming contributing a total of approximately $240 million to the US economy. While Nevada is currently the leader in sports betting in the USA, other states are poised to enter the industry.
As of 2017, around 10 states have put into action proposals to allow online gambling — a move that could potentially increase domestic demand for sports betting in the United States, all while moving gaming providers away from conventional Nevada-based options.
Many of the up-and-coming betting providers are based outside the United States. However, as new sanctions with Iran take effect, these companies could face restrictions on their abilities to operate in the United States, depending on their current business relationships.
Although sports betting is illegal in Iran outside of extremely specific circumstances, many of the world’s top betting companies are heavily used by Iranian punters. Betcart, for example, is listed on bookie comparison websites as a “top choice for Iranian players.”
Another large, UK listed gaming company, GAN, has small ties to businesses that operate in the Islamic Republic of Iran — ties that could potentially affect its ability to expand its sports betting operations to the United States.
Many of these ties, both for GAN and for other gaming companies, are small, indirect and, until recently, unlikely to have attracted any attention for their potential legal consequences.
GAN recently announced a new strategic partnership with SB Tech, a company that supplies a range of gaming industry operators around the world. One of SB Tech’s clients is a major player in Iranian sports betting — a link that could affect GAN’s ability to operate in the United States.
Betcard, another major betting company headquartered in Curacao, uses technology provided by SB Tech — a link that, like GAN, could potentially affect its ability to expand into the United States sports betting market in the coming years.
These companies face an interesting dilemma: Is the small Iranian betting market worth losing access to a much larger, significantly more lucrative market in the United States?
Most American companies have already taken steps to limit theri legal exposure to the latest wave of Iran sanctions. Apple, for example, stated that it “cannot host, distribute or do business with apps or developers connected to certain U.S. embargoed countries” through its App Store.
Currently, the Treasury Department has made its position on the issue clear, stating that any persons or companies engaged in activity with Iran have until November 4 to wind down their activities in order to avoid exposure to legal action.
For betting companies with links to Iran, even indirectly through partnerships, the message is clear: staying in the Iranian market while expanding into the US is a significant legal gamble.