In order to obtain a vendor or supplier license, a provider must submit a license application and obtain approval from the state licensing agency.

This uncertainty may be magnified by “catch-all” provisions in the licensing rules that give regulators discretion to decide, on essentially a case-by-case basis, how a particular provider should be licensed.

Providers doing business in these states may find it challenging to characterize their services and to determine the appropriate license. Several states have two distinct licenses for vendors and suppliers: a higher-level “supplier” (or “vendor major”) license for providers whose services relate directly to sportsbook operations and a lower-level “vendor registration” license for providers whose services do not directly affect sportsbook operations. By way of example, in some states, even the law firms and advertising/media companies providing services to sportsbook operators must be licensed. Vendor/supplier licensing requirements are fairly broad and, in some states, apply to virtually any company that does business with a licensed sportsbook operator. Most states that allow sports betting apply a hierarchical licensing scheme for sports betting operations, imposing an “operator license” requirement upon sportsbook operators, and either a “supplier license” or “vendor registration” requirement upon companies that offer goods and services to sportsbook operators. This article provides an overview of these vendor and supplier requirements, some of which may be surprising to those unfamiliar with the gaming industry. It is critically important for companies in this new space to understand that state licensing and compliance requirements apply not only to sportsbook operators, but also to those doing business with sportsbook operators, such as vendors and suppliers. The explosive growth of sports betting in the United States has opened the door to a variety of new business opportunities for firms in the technology, hospitality, marketing, and financial services industries.

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