How Virtual Sports Is Navigating North America’s Complex Regulatory Landscape

North America’s state by state model in the US and provincial model in Canada is evolving faster than any other market in the world. What are some of the biggest challenges for virtual sports suppliers to keep up with these changes? 

The first challenge is that there really is no single North American market. In the US, every state has its own regulatory framework, tax structure, certification requirements, and view of what products should be permitted. Canada has the same fundamental issue at the provincial level. 

For suppliers, that creates complexity because approval in one jurisdiction does not automatically translate into approval somewhere else. You have to understand the regulatory boundaries in each market and be able to demonstrate exactly how the product operates within them. 

I do not necessarily think that is a bad thing. Gaming is regulated for good reasons, and suppliers should be able to prove how their products work. The problem comes when requirements accumulate independently across jurisdictions, or when regulation changes without considering what those changes do to the regulated market as a whole. 

That is something North America needs to watch carefully. If regulation makes the licensed environment progressively harder to operate in or less attractive to customers, the activity does not necessarily disappear. Some of it simply moves somewhere the regulator cannot see it. 

We have already seen enough evidence from mature markets to know that this is a real risk. 

Certification and compliance requirements vary significantly from one jurisdiction to the next. Has this inconsistency had any impact on the development of virtual sports as a vertical in North America? 

Of course it has. Every jurisdictional difference adds time, cost and complexity to bringing a product to market. 

But virtual sports also has a particular challenge in North America. The category is established in other parts of the world, but dropping it onto a North American casino floor requires more than just consumer education; it requires fundamentally aligning with how those floors actually operate. So we are dealing with a structural operational challenge at the same time as a regulatory one. 

From a compliance perspective, I think the important question is what actually needs to be controlled. The mathematics, wagering functionality and outcomes are all part of the certified product. Those elements need to be stable, testable and auditable. 

Around that core, presentation and technology will continue to develop. Regulators need confidence that those developments cannot interfere with the certified functionality, while suppliers need enough clarity to know where they can innovate without reopening the entire regulatory process every time something changes. 

The objective should not necessarily be identical rules everywhere. That is probably unrealistic in North America. What matters more is clarity and consistency around the principles regulators are trying to protect. 

Alberta has opened its regulated sports betting market, making it one of the most significant regulatory moments in Canada in recent years. What does that mean for virtual sports specifically, and what kind of opportunities does it present for a supplier? 

What makes Alberta interesting is not simply that another regulated market has opened. It is the way the province is thinking about what success means. 

Alberta has had a substantial amount of online gambling taking place outside the provincial regulated environment. The question is whether a competitive market can bring more of that activity inside a system where there is proper oversight. 

That is a much more realistic starting point than assuming regulation somehow makes the offshore market disappear. 

For virtual sports suppliers, a competitive market naturally creates more opportunities to work with licensed operators and introduce products within that environment. But I think the more interesting story is what Alberta tells us about regulation in Canada. 

Ontario was the first major experiment, and executing a successful, on-time launch there required suppliers to enforce strict operational discipline and restructure project management when necessary. Alberta gives us another model, and it is significant that channelization has been part of the conversation from the beginning. 

The important thing now is to see what actually happens. Does the regulated market attract customers who were previously playing elsewhere? Can it maintain strong standards while remaining competitive with the offshore market? Those results will matter well beyond Alberta. 

Channelization is often held up as the biggest indicator of market health, especially in Canada. What role can virtual sports play in this? 

Channelization is one of the most honest measures of whether a regulated market is working. 

The useful question is not simply how much gambling is taking place but how much of that is happening somewhere a regulator can supervise it and intervene when necessary. 

Ontario understood that when it opened its competitive market. Rather than pretending the existing grey market did not exist, it created a route for operators to come inside the regulated perimeter. Alberta is now pursuing its own version of that approach. 

Virtual sports is one part of that equation. A healthy regulated market needs sufficient product choice to give customers a reason to remain within it. If a product people want is readily available offshore but unnecessarily difficult to access in the regulated market, that works against channelization. 

That does not mean lowering regulatory standards to compete with offshore operators. It means recognising that the quality and usability of the regulated market matter. 

This is where I think the United Kingdom provides an important warning. You can continue adding restrictions to the regulated environment with perfectly defensible intentions, but eventually you have to ask where the displaced activity goes. 

In a digital market, there is no physical boundary keeping customers inside. Regulation has to account for that reality. 

As the North American market matures, what does a genuinely well-regulated and healthy virtual sports ecosystem look like, and what steps are needed to get there? 

I think it comes down to clarity, proportionality and channelisation. 

Suppliers need clarity about what is regulated, what requires certification and where the boundaries sit. Regulators need enough transparency to understand exactly how products work and confidence that the certified elements cannot be altered without their knowledge. 

Proportionality matters because not every problem requires another layer of friction. Regulation should address specific harms and failures rather than treating participation itself as the problem. 

Then there is channelization. This is where I think North America is going to become particularly interesting over the next few years. 

We are already seeing different approaches emerge. Some US states are putting greater fiscal pressure on their regulated markets through higher taxes and additional costs. Canada, Ontario and Alberta have taken a more explicit approach to bringing existing activity inside the regulated perimeter. A healthy ecosystem is not one where regulators simply approve more products or where suppliers face fewer rules. It is one where customers have a compelling reason to use the regulated market, regulators can properly supervise what happens there, and suppliers understand the standards they are expected to meet. 

If regulation makes the legal market progressively less competitive while leaving the unregulated market easily accessible, you have not necessarily reduced the underlying activity. You may simply have moved it somewhere you have less ability to oversee. 

That is the balance North America needs to get right.