Why cash might be king online for US sports bettors
Cash payments solutions could be the key to unlocking the potential in the US online sports betting market
Since the repeal of the Professional and Amateur Sports Protection Act (PASPA) in May 2018, each state in the USA has been free to independently legislate both retail and online sports betting.
States have taken different approaches to regulation, and at different paces. To date New Jersey, West Virginia, and Pennsylvania have joined Nevada in regulating online sports betting; several other states have also passed legislation that permits online sports betting but no platforms are yet to launch in those markets.
Payment methods are a differentiator for operators, especially cash PINs
As more states regulate online sports betting and momentum continues to build, the number of operators entering the market will increase. And while the potential market size of sports betting in the US is substantial, for operators, being able to stand out from their competitors will be critical to acquiring market share.
Account deposit and withdrawal methods have a huge role to play here. In our 2019 consumer research report into the US sports betting market, All the ways players pay, we asked players about this; almost a quarter of both current sports bettors (23%) and consumers that would strongly consider betting on sports in the future (22%) identified the number of deposit methods available to them as crucial when determining which sportsbook they would wager with.
Cash solves the issues for players
And it isn’t just the number of available payment methods that is a priority for players. How they can deposit is critical too, and for the majority of players being able to deposit cash into their online sports betting account is preferable.
When asked, 55% of US players stated that if were easy to do so, they would prefer to use a cash voucher rather than a credit card when placing a wager online. There are a number of reasons such a significant number of players might want to place wagers with online cash PINs:
1. Payment security is the greatest concern for online sports bettors
Only 36% of US players believe that placing a sports bet online is as secure as placing a bet in-person, so it is of little surprise that there is a preference for making deposits using a method where a player’s financial data such as a credit card or bank account details are not shared.
35% of current sports bettors and, perhaps more significantly, 45% of US consumers that would strongly consider betting on sports in the future cited security as a key factor when selecting an online sports betting platform. This percentage was greater than any other factor, including player experience and the fees associated with placing wagers. Clearly, the available payment methods are a cornerstone of assuring players as to the security of their financial data, with online cash being perceived as the most secure payment method available.
2. The need to combat card declines
Five years into regulated online gambling in some US states, it has been estimated that bank card acceptance rates may be as low as 30%, as many of the major issuers of VISA and Mastercard in the US do not process any online gaming deposits. This is an issue for both players, who are frustrated by this obstacle preventing them depositing with regulated operators, and the operators themselves as this is having an extremely negative impact on their conversion rates.
51% of players that had experienced a card decline when trying to make a deposit into an online betting account told us that this happened most or all of the time, so many players are turning to alternative payment methods as a primary or secondary deposit option instead. Online cash PINs are one such option; players can be certain that their deposits will not be declined, meaning that operator conversion rates are increased.
A further benefit to operators where players deposit with cash PINs instead of credit cards is that all funds are guaranteed, and that they are indemnified from chargebacks.
3. Players value privacy
When asked what would make them consider alternative payment methods, one in four (25%) US sport bettors said that they would prefer to deposit into their online sports betting account in a way that ensured their privacy.
When depositing via an online cash PIN, no sensitive personal details are shared, which is not only the preference of these consumers but also to the benefit of operators that then do not have consider how to securely manage or store this information.
It is difficult to predict precisely how the US online sports betting market develops in the coming years, as unique influencing factors mean that no two markets ae identical. However, through researching the attitudes and preferences of players, and analysing the major hurdles for operators, one conclusion that can be made already is that operators that place online cash solutions at the heart of their deposit options stand the greatest chance of establishing a significant share of the market.
All the ways players pay is available to download now.