CORRECTION: Net Entertainment evaluates options ahead of US entry18th October 2013 7:50 am GMT
Net Entertainment is evaluating its patent portfolio ahead of its entry into the intrastate regulated US iGaming market to avoid any potential intellectual property disputes with market incumbents.
Speaking to Gaming Intelligence, the company’s chief executive Per Eriksson said that while the company is currently working through its intellectual property rights and talking to potential US partners, it is taking a “cautious” approach to the market.
While the European online gaming market allows companies to develop games with little restrictions on different game mechanics and special features, US suppliers typically look to acquire patents for the majority of the features they use in order to differentiate their products and maintain a competitive advantage. IGT, for example, files on average 200 patents each year.
These patent war chests could see US companies bring legal action against European games developers that attempt to enter the American market, and while Eriksson notes that it is “too early to say” how the company may tackle the problem, he concedes that it is a concern.
“We are looking at the issue right now, and with some games we don’t need to do much [to ensure the products do not infringe on existing patents], and others we might not even think of bringing to the market,” he explains.
Eriksson suggests that the company would look to establish partnerships with patent holders, or at least work with the US companies in order to avoid legal disputes.
“We also have IP rights so we can trade off on these, depending on who we are going to partner up with,” he says. “If we partner with the companies holding a large number of patents it is going to make entering the market much easier for us.”
And despite earlier suggestions that the US market will be a key cog in Net Ent’s expansion, Eriksson says he needs to know exactly what the cost will be to enter the market. “We won’t just jump in and pick up the tab later,” he asserts.
“We will not be live [in New Jersey] on November 26th but as soon as we are ready we will enter the US market.” Eriksson adds that while the launch of online casino in New Jersey is “very exciting”, the market will become a more attractive proposition once other states introduce regulation.
“Other states like Pennsylvania will soon open up and the more states that open up the more interesting it is to be there,” he said.
This cautious approach is not limited to the US market. Eriksson said the company will take a similar approach in the Spanish market, where online slots are due to be legalised, by only making a final decision once the company has all the relevant information, including the Spanish government’s proposed tax rate for the vertical.
Correction: The headline and first paragraph of this article were amended at 14:50 GMT to remove reference to a possible delay in Net Entertainment’s entry into the US market. The company has not previously set a timetable to enter the US market and the article was amended to remove any suggestion to the contrary.