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.”