PA’s online sportsbook faces huge hurdle, thanks to Apple

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Casino House of Sucre recently became the first to market Online sports betting in Pennsylvania, opening its digital doors to punters via its website PlaySugarHouse.com as well as the SugarHouse Sports Betting Sound application for Android mobile devices.

However, clearly absent, a IOS app for iPhone/iPad.

They are not the only ones either. PlayPennsylvania reports that several operators have encountered similar difficulties. We know that this is not a legal problem, but rather a problem Appleinternal approval processes of App Store.

What is really going on here?

SugarHouse is keeping a low profile on the specific issue, but informed speculation at the outset is that it was likely that SugarHouse and others encountered Section 4.2 “Minimum functionality” in the App Store review guidelines.

This section states that in order to receive approval, applications must “include functionality, content, and a user interface that elevates them beyond a repackaged website.”

In other words, in order for a sports betting app to receive Apple approval, there must be some distinct differences between using it and just opening it. Safari Where Chromium on your iPhone and by visiting the mobile version of the site.

Most existing sports betting apps don’t meet this test, but developers in other industries note that Apple has become more stringent on the requirements over time.

Apple changes to online gambling and sports betting

By June 3, however, it became apparent that more was going on than that. Apple has released updates to its guidelines, one of which, for section 4.7, deals with real money games More precisely:

“HTML5 games distributed in apps may not provide access to real money games, lotteries or charitable donations, and may not support digital commerce. “

This rule takes effect immediately for new apps and those awaiting approval, but even existing apps only have a three month window to comply and will be removed from the App Store on September 3 if they haven’t done so.

This will have a huge impact both for existing operators in the international marketplace and for those looking to enter the burgeoning US market as new states pass enabling legislation. It will also affect not only online sports betting, but online poker and in line casino offerings too.

Controlling the “Apple experience”

The timing is surely no coincidence, but Apple’s motivation remains unclear. Apple has always been obsessed with the idea of ​​a unified user experience, trying to get developers to design their apps to look as close as possible to those developed in-house by Apple.

The nature of desktop computing is such that strict enforcement is not possible, so for Mac Developers, Apple had to content itself with publishing a set of recommendations.

For its mobile devices, on the other hand, Apple has convinced its customers to accept the idea that all applications must go through its App Store, except those that have the will and the technical know-how to jailbreak their devices. .

Work in the native system

Apple would love for everyone developing for iOS to do it natively in Cocoa, its own application programming interface. It includes a comprehensive set of graphical control elements that give Apple applications the look and feel of Apple applications.

Developers, on the other hand, obviously prefer the ability to write their code once and deploy it to as many platforms as possible. In the case of games, Apple has had to compromise.

Most game developers don’t have the budget to develop separately for multiple platforms. Taking a hard line and insisting on native development would mean that many games would simply not be available for its devices, which in turn could hurt the popularity of its products.

Sports betting is not quite the same as angry Birds, however, before this week’s update of Guidelines, it just seemed like Apple was choosing to draw a line between the two.

After all, a sports betting app is mostly made up of grids, menus, and forms, and these are exactly the kinds of things that Cocoa’s UIKit contains that Apple would like to force developers to use as much as possible.

Cover the legal bases of online gambling?

However, the content of the update as a whole, combined with the fact that it explicitly refers to real money gaming, suggests that there may be other motivations. Most of the changes to the Guidelines suggest they were spurred on by Apple’s legal department, tightening up data privacy policies, for example.

Additionally, section 4.7 – the one cited above – clarifies that the functionality for real money games etc. is “only suitable for code embedded in binary and may be examined by Apple”.

Thus, we may be witnessing a precautionary clarification of a gray area by Apple.

In the details …

While Apple only takes responsibility for ensure the legality of the code embedded in the binaries it distributes through the App Store, then it may worry that companies are trying to use HTML5 as a workaround.

If this is the case, it may ultimately find itself embroiled in a legal battle over whether it is responsible for the uncompiled code distributed with the applications, as well as any that is embedded in the binary itself.

Any sort of real money transaction would be particularly dangerous in this regard. This would explain why, while real money games and lotteries are listed in advance, charitable giving and digital commerce are also included.

Participate in the game action?

There could also be a profit motive for Apple, although that is far from clear at this point. While hardware remains its core business, services, including the delivery of digital content via itunes and the App Store – now account for nearly one-fifth of its net sales and one-third of its revenue, after cost of sales.

Currently, Apple is taking a 30% commission on app sales and in-app purchases, and 15% on subscriptions lasting more than one year. This does not include products “made outside the app”, such as physical products purchased by customers using the Amazon application, for example.

However, real money gambling does not involve a physical product. When the app provides HTML5 code to connect to an external website that handles deposits and withdrawals, transactions are “outside of the app”.

Yet if Apple requires developers to handle all transactions with compiled code, then any such transaction that does not involve a physical product could be considered an in-app achievement, and therefore subject to a discount. by Apple.

Losing on a cut?

As it stands, real money betting and gaming apps are generally distributed for free, but Apple incurs a cost to review these apps and distribute them through the App Store. It’s probably a sore point for Apple that game companies are using its services for free to make money, while avoiding the need to share the profits by handling all transactions externally.

With regulatory developments in the United States, the real money gambling and sports betting market will become much larger in the years to come. Apple could try to get some leverage to negotiate a piece of the pie.

Aggressive schedule for online gaming operators

Either way, this is going to be a huge problem for online gaming operators until a satisfactory solution is found. International operators have found that their mobile products are gaining in importance, especially in terms of customer acquisition, and the iPhone has more than one 15% market share.

For real money games to simply remain unavailable on iOS would be unacceptable to operators and possibly damaging to Apple in the long run as well, whether or not there is a direct financial interest. Given the timing of the new Guidelines and the short compliance deadline for existing operators, it appears Apple is trying to force a quick timetable for negotiations.

So it should not be long before we see what the possible compromise will look like. This will tell us more about Apple’s goals and what we can expect in other states in the future.

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