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Will COVID-19 Spell End Of The Wire Act? Stakeholders Disagree

Written By Brant James on May 6, 2020 - Last Updated on October 6, 2023
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Fifty-nine years after the Wire Act was passed and 16 months after a Department of Justice re-interpretation of it sent a spasm through the burgeoning US gaming industry, stakeholders and entrepreneurs continue to debate over the extent to which the 20th-century law will impact their high-tech business opportunity.

Such was the case at the SBC Digital Summit, with Wayne Kimmel of SeventySix Capital sounding bullish on the Kennedy Administration’s anti-mob law being “done in the next couple of years.” But Adam Greenblatt, CEO of Roar Digital, pushed back as hard as cordiality would allow in telepresence.

Both Greenblatt and Kimmel appeared as part of a panel entitled “M & A and Investing in Sports Betting Companies.” During the panel, the Wire Act was only one of the topics on which Kimmel and Greenblatt disagreed.

The whole discussion spurred a bit of a debate on the pandemic’s potential impact on entrepreneurship in the US gaming industry and the controversial Wire Act.

COVID-19’s potential impact and where the Wire Act comes in

Kimmel believes COVID-19’s hammering impact on land-based gaming has revealed an opportunity for mobile and online business. And the Wire Act, depending on the interpretation, hampers that opportunity.

“I think a lot of the regulations, the laws, the blockers, the things that are happening or that we have in the United States right now, I think some of those things are going to go away,” he asserted. “I’ve been out there talking about the Wire Act and thinking that … I’m sorry, that’s done in the next couple of years.

“My team and I at SeventySix Capital, we believe that’s gone and I think that’s going to really, really affect a lot of players in this industry and will allow more innovation and allow more entrepreneurship. So, believing those kinds of things, looking out to the future and not just saying the world’s going to be like it is right now – because no one would have believed that all these casinos and sportsbooks would be dark – I mean, who could have ever imagined this? And I think coming out of this, other types of things are going to happen and that’s where I believe a lot of the opportunity will come from.”

Countered Greenblatt: “If you’re right and we see the end of the Wire Act, I’m taking us out for dinner and we’re drinking the most expensive champagne, my friend. But I can’t see it.”

Litigation will ultimately determine which is correct.

Kimmel: many new opportunities for entrepreneurs

Founded by Kimmel in 1999, SeventySix Capital specializes in sports tech venture capital, according to its website, including multiple gaming projects. Roar is the global collaboration between MGM Resorts International and GVC Holdings.

Kimmel compared the nascent American sports betting industry with the Internet landscape of the early ’90s — and how these opportunities of the time period made bold-thinkers into billionaires.

“There was this opportunity,” Kimmel said, “where entrepreneurs came in and really disrupted the way we not only did business but the way we lived and the way we do things. Similar to what happened then, I believe that same kind of thing is going to happen here within sports betting.

“I believe that there will be a lot of M and A’s, but at the same time there will be players that will come out of nowhere that you have never heard of before. You’ll see there will be the next Steve Jobs or the next Mark Zuckerberg, there will be those types of players in the industry.”

Greenblatt’s counter-argument: lots of hurdles for newcomers to break through

In a business environment increasingly laden with consolidation and the emergence of massive alliances such as the just-completed Flutter Entertainment acquisition of Stars Group, start-ups and mid-level players will struggle, Greenblatt countered. He seemed to be casting an eye on the players who didn’t come out of the bubble as well as Jobs and Zuckerberg.

“I disagree, actually, with some of the views previously expressed not because they are not logical, but because they underestimate the role of compliance and the impact of state-by-state as this market rolls out,” Greenblatt said. “Whereas in the early stages of the Internet what, as a global collective, we were doing was breaking new grounds enabled by technology, the US is just really a new geographical frontier where that really mature industry is able to penetrate, to roll out.

“It’s not like there is no Amazon. We have Amazons in our space. We’ve got the GVCs and the Bet365s and the Flutters and to unseat any of those will take number one, any enormous amount of capital. In fact, I don’t think it’s possible.”

Establishing the resources to win at compliance at a state level and quickly applying “product, marketing tools, affiliate tools, KYC tools, responsible gaming tools” without friction — as well as high-level corporate rivals — will be a daunting task for newcomers, Greenblatt added.

“I think it is not possible in this generation for a startup to unseat the global market leaders. I think M and A will take place at the very highest level, as we’ve seen now with Stars and Flutter, there will be some vertical integration taking place as we’ve seen with [DraftKings] and [DK and SB Tech], he said. “But, I think to bring together a collection of disparate assets or grow from grassroots into something which can compete for leadership, I think, is too difficult.”

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Brant James

Brant James is a veteran journalist who has twice been recognized in the Associated Press Sports Editors Awards, most recently in 2020. He's covered motorsports, the National Hockey League and Major League Baseball among a myriad of others beats and written enterprise and sports business for publications including USA TODAY,,

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