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Have skills, will travel...
A lesser-known benefit of the PASPA ruling for work-weary Brits and Europeans is the opening up of a shiny new job market in the US. Executive search experts Andrew Bulloss (left) and Bambos Eracleous (below) from Odgers Berndtson run the rule over the pitfalls and opportunities lying across the pond
The day PASPA was repealed in the US we had at least half a dozen calls and emails from European industry execs and senior management asking whether we had any live assignments in the US.
Some of these were probably tongue in cheek, but it has since become clear that the PASPA decision could usher in an estimated $2-5.8bn annual GGR market in the next five to seven years. Obviously this offers an opportunity for European igaming and sportsbetting talent to shine on another continent.
As we all know a debate has raged for years as to whether sports betting would become a reality in the US, and during that time many industry stalwarts have had their hopes pinned on leveraging their skills and experience over the pond.
At one point we were worried about a potential brain drain of UK and European talent into the US gaming market, but it seems our concern was unfounded. It’s not going to be that easy for the Brits and Europeans among us to hotfoot it to the States to start the next phase of their career.
There are a number of factors that need to be considered here.
Borrow, buy or build (a team)
Clearly there are a number of established UK and European operators and suppliers likely to benefit. William Hill has already started to accept bets in New Jersey through its tie-up with Monmouth Park racetrack, while Paddy Power Betfair is also well placed through its TVG business and recent acquisition of FanDuel.
Elsewhere, SG Digital, through its OpenBet subsidiary and links into US casinos, is well positioned as are numerous others.
No doubt many of the other tier one operators and suppliers (as well as many of the tier twos and threes!) are already in conversation with US partners, in most cases as providers of technology and product.
What we haven’t seen many people discuss is the potential for M&A led by US casinos. There may be some important deals to be done by US casinos particularly, leveraging their cash-rich balance sheets to buy an operator or supplier outright.
Why license a platform or product that can be used by competitive casinos or racetracks when you can just buy an operator or supplier outright with pocket change?
Notwithstanding the potential opportunity for M&A as well as the obvious product and platform tie-ups, there will also be a clear need for the casinos and tracks to hire specific sports betting, and in time igaming, talent.
How do you balance a US protectionist attitude around jobs with a lack of US-domiciled sports betting skills (especially online)? The European market is full of igaming and sports betting talent, but the US operators are hardly going to roll over and allow an influx of overseas talent to dictate their market.
More importantly, neither are the US immigration authorities going to allow in more people than is necessary. This leads us to…
The ‘visa’ problem
There are a number of expat Americans with sports betting skills (and all-important green cards) who are currently employed in the UK and Europe. These people will be the first port of call for US operators looking to fill key roles in newly formed structures.
In addition, there will be those who have the right to work through marriage, or who are Canadian, which also makes the relocation process easier…
The US immigration process is arduous. There are almost 60 different types of temporary US non-immigrant visas in addition to several employment-based, permanent residence routes. Getting a green card can take years.
The next option is to secure a first, second or third preference priority worker visa which will depend on whether sports betting knowledge is seen as an ‘extraordinary’ or ‘exceptional’ ability in the eyes of the immigration officials!
The most likely route for most executives will be through an H-1B visa, designated for workers in ‘speciality occupations’. However, when the US economy is doing well the visas run out and it becomes a lottery to get hold of one. This obviously puts a limit on the number of overseas people taking up roles in the US each year.
We’ve heard of some businesses looking to create teams in Canada to circumvent the problem, while joint ventures with a US-based entity may also be a workaround. Who knows, maybe the US gaming industry will find a way to influence US immigration to offer more visas to non-US ‘specialist’ execs?
This is highly unlikely given the absence of a federal solution for sports betting, but it could be an option if the lack of available talent restricts the growth of the sports betting market on a state-by-state basis and therefore restricts state government taxes from gaming.
The other option open to US employers is to hire teams made up of people already on the ground in the US. There are a number of experienced igaming and sports betting execs already in the US, although it is a small pool.
Another possible solution is to hire more ‘junior’ people already operating in the sports and igaming market in Nevada or New Jersey, but there’s a risk these people won’t cut it in more senior roles.
The other option is to hire talent from other sectors, namely retail, media, entertainment and tech. This might be OK for commercial and marketing roles as well as functional roles like HR and finance, but it doesn’t fill the skills-gap for specific sports betting expertise. None of these are the only solution to the visa problem.
Who will be hiring and what will they be hiring for?
In the next 12 months, US casinos, racetracks, media and data businesses, sports leagues and UK and European operators are all going to need to consider hiring sports betting talent in some shape or form in the US.
Leaving aside the question of where they will get them from, what sort of skills and experience will be required? If we were betting men then we would put money on the following:
Product and technology
While much of this can be provided through supplier and operator relationships, the opportunity to create differentiation in what will be a highly competitive US market is important, whether that be through product or functionality.
Naturally, it would be sensible for a US casino with limited sports betting knowledge to have someone sitting their side of the fence challenging the UK and European suppliers and putting their feet to the fire on the promises they have offered.
Integrity, legal, risk and compliance
The ongoing integrity of sports betting in the US will be critical to its success and longevity. Any indication that the outcome of US sports events is being compromised through sports betting, or suggestions that operators are acting in any way irresponsibly is likely to be met with a very strong arm of law.
In-house lawyers and experienced compliance professionals are likely to be in demand.
Trading and retail bookmaking
Automated trading has become the norm in Europe and a good deal of this capability will be leveraged for the US sports betting market. However, given the embryonic nature of the sports betting industry in the US, this may well create a revival for ‘traditional’ forms of bookmaking and trading.
Technology will inevitably have a part to play here, but certainly in smaller, retail-led sports betting sites the ability to offer relevant, personalised markets for customers will be key.
In some respects, the ability of frontline retail staff to educate punters will help build brand and product loyalty with what could be a new sports betting customer base in the US.
Over time, there may be a need for digital and performance marketing skills to acquire and retain customers through non-retail channels. However, we expect that the American casinos feel they know enough about retail marketing that offline brand and loyalty marketers won’t be the first skill-set they look for from overseas.
The need for more specific sports betting marketing skills will largely depend on regulation, ie whether sports betting advertising will be allowed in the US and what the player promotion and bonusing landscape is going to look like compared to Europe.
Location, location, location…
Given that four of the five states expected to be early movers in terms of sports betting legislation (New Jersey, New York, Delaware, Pennsylvania, Mississippi) are based on or around the East Coast, it looks like one of Philadelphia, Atlantic City or New York will become a hub for talent as US sports betting starts to take shape.
We would be surprised if New York isn’t the destination of choice for many when you consider its infrastructure, proximity to the HQs of the various US sports governing bodies and access to broader talent outside of gaming in media, technology and e-commerce.
What’s more, having a sports betting talent hub on the East Coast is especially helpful from a time zone perspective with Europe.
That is not to say that Las Vegas and the West Coast cities of LA and San Francisco will not play their part.
Nevada is a current hub of land-based sports betting talent in the US (probably the only one right now) and as the industry evolves it may be that some of the major media conglomerates, social gaming and interactive entertainment businesses headquartered on the West Coast start to play their part in shaping the industry.
Interims – a flexible solution
Interestingly, the most urgent market chatter has been about interim opportunities. Firms are reaching out for interim managers who can be deployed quickly to the US to get operations off the ground. Technology, digital marketing and Customer Relationship Management (CRM) experience is evidently in high-demand.
All of these are areas that are crucial in securing new customers and supporting product development.
There is a definite rush to find good quality people ideally with sportsbook product and tech knowledge to help scale. People with these skills who are also eligible to work in the US are few and far between, so quick and easy access to this small pool of talent will be a key factor.
Play the long game
The PASPA repeal is exciting.
It’s an opportunity for many industry execs who have become tired of the UK and European scene to use their experience in a newly opened market, to maybe try out some of the creative ideas they might have shelved because they didn’t fit the model for an operator overly reliant on certain customer segments.
This is the long-term view rather than the short-term one.
Many people are hoping that the opening of the US sports betting market will be a catalyst for innovation and will drive new product, technology and marketing ideas and techniques that perhaps could find their way back to the UK and European markets.
From a talent perspective, this is all about balance. A balance of US-based talent with the European sportsbook and igaming expertise. As a European, there are likely to be long odds on securing a US working visa right now, but if you are one of the lucky punters to get one you may just have hit the jackpot…
Andrew Bulloss is partner and head of global gaming practice at Odgers Berndtson. He specialises in executive search for organisations recruiting directors, senior executive, C-level and non-executive directors in the international gaming and gambling industries. He is the practice head within Odgers Berndtson responsible for promoting our firm's global capabilities within these markets internationally.
Bambos Eracleous is partner, gaming, sports & media at Odgers Interim. With organisations facing unprecedented challenges requiring fresh thinking, specialist expertise, problem-solving capabilities, flexibility and transformational skills. Odgers Interim supports organisations in providing high calibre interim managers in the UK, Canada & Australia.