ANALYSIS: The importance of remote registration to the Wedge Index
Remote registration is one of the key factors when a state legislates for online and mobile betting hence its importance in the Wedge Index ratings.
Barstool Sportsbook’s debut at the end of September in Pennsylvania highlighted the importance of apps as a key determinant of whether a state will be successful in its regulation of sports-betting and online gaming.
In its first weekend, Penn National said that the Barstool sports-betting app was downloaded 30,000 times in Pennsylvania and over 180,000 times countrywide. Of those 30,000, a 12,000 made first-time deposits.
Such is the importance of remote registration and it helps explain why it counts as much as it does to a state’s Wedge Index, the official quality score for legal gambling within the US.
As it stands, eight states have remote registration as a factor in their legislation, gaining each 15 points on the Wedge Index.
States with remote registration and Wedge Index ranking:
- New Jersey (1st)
- Pennsylvania (2nd)
- Colorado (3rd)
- Indiana (4th)
- West Virginia (5th)
- Illinois (6th)
- Oregon (8th)
- New Hampshire (10th)
The reasoning for remote registration importance is simple. From the perspective of both the competitive landscape and when it comes to state tax revenue-raising potential, enabling online and specifically mobile betting and gaming will bring gaming options direct to the consumer. And as a corollary to that remote registration – as opposed to having to visit a land-based gaming venue in order to sign up – is they key element.
“Some US states have overlooked the importance of remote registration,” said the team at Union Gaming in a note on Penn National earlier this year. “The remote registration process for online sports-betting is an extremely efficient process that takes only a few minutes and is as simple as pulling out one’s smartphone, verifying identity, and providing credit-card information.”
The Union team noted that despite the evidence in favour of remote registration, some state legislatures still opt for the conservative option of in-person registration at a casino, move which Union Gaming suggest limits market potential by creating unnecessary friction for the consumer and particularly those customers which might not already be casino patrons.
But Union Gaming went on to suggest that as examples of remote registration proliferate across the US, more US states will “convert to remote registration” as it becomes more evident that identity verification processes are more than capable of delivering sufficiently robust online registration.
Moreover, the team also suggest that remote registration is key to preventing leakage to neighbouring states which already have remote registration in place or to the black market.
“The grey/overseas sportsbooks have been operating both efficiently and digitally for decades and, by some estimates, taking in $150bn worth of bets annually from US residents alone,” they wrote.
The state where remote registration is most clearly absent is Nevada. Despite all the historic benefits that accrue from being the premier gaming state in the US pre-PASPA’s fall, Nevada is current 8th in the Wedge Index with 41 points, some distance from the leader New Jersey with a total of 116 point. But were remote registration to be added in Nevada it would add 15 points to the total and bring Nevada up to 5th.
Of course, the current pandemic and its associated lockdowns is also changing the minds of legislators on remote registration.
This is most clearly happening in Illinois where Governor JB Pritzker has extended the enabling of remote registration, a move which was instigated earlier in the summer in response to the pandemic.
The move is seen as benefiting both DraftKings and FanDuel which do not have a physical presence near Chicago at present. According to reports, more than 230,000 mobile wagering accounts had been registered in Illinois by mid-September.
“Over time, we expect state governments will conform to the most efficient regulatory model,” said the Union Gaming team and it is hard to see given the evidence piling up that states without remote registration will continue down that path for long. As the Union Gaming team concluded: “The next wave of states legalizing sports betting have been taking notes.”
This is undoubtedly true. Gavin Kelleher, analyst at Goodbody, said during the summer that there were likely to be two drivers to further state-by-state legislation. First, states suffering from the ill economic effects of the pandemic were likely to view sports-betting as a mean to generate much needed taxes.
Second, Kelleher added, “land based gambling interests (casino groups, race tracks etc) will be keen to generate funds post COVID and this could change opposition to online that may have existed previously.” This will surely bring more of them around to the potential for fully operational online and mobile betting and with it more remote registration.