The latest in our Payment Innovation series analyses the approach to new markets, as we spoke to Jeremy P. Kleiman, Partner of Saiber LLC, who described the importance of collaboration when it comes to market growth.
Kleiman detailed that it’s pivotal to understand market behaviours and nuances as operators venture into new territory.
Payment Expert: Firstly, how important is the sharing of knowledge and discussions like the one you’re having in Barcelona when it comes to market expansion?
Jeremy P. Kleiman: It is vital that B2C operators and B2B suppliers that are considering expansion into new markets engage with experts who can educate them on the unique aspects of the regulatory landscape.. Regulatory regimes and commercial landscapes vary wildly in different markets and it is essential to understand the nuances.
Can you give us some more details on the approach you take from a regulation standpoint when entering new markets?
My approach is to get into the “DNA” of the company I am assisting, to fully understand their history, structure, existing business model, markets in which they currently operate and to understand their commercial objectives in entering new markets. Then, we tailor the regulatory approach to licensing on a case-by-case basis in each new jurisdiction.
How crucial is research to ensuring that market trends are adapted to new markets?
Research is the key to success. Too many operators and vendors enter new markets without a fundamental understanding of the local market fundamentals such as player preferences, average spend and local customs.
Moreover, too few market entrants properly research the economics of that market and without having built a proper financial model. One must understand tax rates, regulatory costs, market size, number and quality of competitors, player acquisition costs, marketing restrictions, capital requirements, cost of capital and other factors in order to be successful.
Why is a localised approach so crucial to both compliance and maximising engagement in new regions?
In the US in particular, the 50 states are really 50 separate countries with entirely different gambling legislation and regulatory regimes. Market access rules, compliance obligations (both technical compliance and regulatory compliance) and licensing rules vary greatly. It is imperative to have local advisors and a local plan in each market.
Can you provide us with some of the tools that you utilise to ensure that new market entries are as successful as possible?
The key to operational success for new market entrants is leveraging existing operational strengths and experiences and coupling it with local resources who understand the local market from a commercial point of view. The key to regulatory success is to engage in pre-vetting to understand if the existing enterprise is operating in a compliant way in other markets, and if it is likely to be found suitable for a gaming licence in the new market. This is critical to a smooth licensing process.
Lastly, in terms of cross-border payments, why is this so crucial in an increasingly globalised payments ecosystem?
Gaming is global. The truth is that in the US, the vast majority of mobile casino and sports betting operators, platform providers, content providers and other vendors that are part of the ecosystem are non-US businesses. So, by definition, the gaming market in the US is a global business. Cross-border payments are crucial to allowing the ecosystem to function.
Looking ahead to the SBC Summit Barcelona, the Payment Innovation series places a closer analysis on some of the industry’s key technologies and developments.