Apple sent shockwaves through the gambling industry on June 3rd when it updated its App Store Review Guidelines. Guideline 4.7 now states that HTML5 games distributed in apps may not provide access to real money gaming or lotteries. Essentially, Apple wants every real-money app to be designed specifically for iOS. Companies with HTML5 real money gambling apps have only until September 3rd before being removed from the iOS store, which is a near impossible task. This new requirement follows an update of the 4.2 guideline earlier this year which required apps to have a “minimal level of nativity”, meaning that sportsbooks, casinos, bingo and lotteries can no longer simply repackage their websites as apps.

Almost all gambling apps are built using HTML5, including many if not all current iLottery apps in North America. The reason that almost 95% of gambling apps are designed in HTML5 is because it tends to be more flexible. It allows lotteries to utilize existing assets like their website by turning it into an app that then can be deployed on both Apple and Android platforms. This significantly reduces the cost in building and updating an app since all three portals can be changed at once.

Industry experts, like mkodo CEO Stuart Godfree, have suggested that importing a game would take about eight weeks to do. An entire sportsbook would take more than six months. Live casino apps could take nine to twelve months.

There is another problem. It will also be very expensive to do the update, according to Jackpocket CEO Peter Sullivan, whose courier app is built in Swift (which is a native iOS language and therefore will be able to continue operating): “ One of the reasons why it’s cheaper to build HTML-based apps is because it is much easier to find developers that code in that language. Finding good Swift developers is difficult and expensive. Finding great ones are nearly impossible.”

It would be difficult for lotteries to be able to update their apps in the given timeframe, which is bad news. “Mobile is critical to the success of our iLottery program, and like everyone else in the industry we are trying to decipher Apple’s latest guidelines. If the Pennsylvania Lottery mobile app is removed from the Apple store, it is safe to say it will have a negative impact on our program and funding for our good cause – which is funding for older Pennsylvanians,” Stephanie Weyant, Deputy Executive Director, Marketing & Products, Pennsylvania Lottery, said.

Lotteries are left with a very difficult choice in how to proceed. Lotteries could abandon the iOS app store. Players can still access iLottery games through their website. In the past, some lotteries have used a “lite” app that opens iLottery games in a browser. But, lotteries experienced a large drop off in play when employing this “launch vehicle” model because it is a clunkier experience. “It’s difficult to see how operators will react. In my opinion they have two choices. To abandon the iOS apps entirely and move only to web delivered solutions; or move their sportsbook, casino, table games, bingo, lottery instants etc over to be either embedded or native,” Godfree said. “However, the first option is going to be difficult as the App Store is one of the world’s largest advertising and distribution networks. Not being part of this is going to force great advertising spend to recoup for the lost natural discovery that the App Store provides.”

Many have worried that Apple is targeting real money gambling apps, but Apple does have legitimate reasons for the update. Apps currently go through an in-depth approval process (even for app updates). After Apple fully vets the changes and approves them, there a put on to the App store. But apps that utilize HTML5 can call onto a server and essentially ‘update’ the software, game, or interface without Apple knowing. “Imagine Apple being put in a position where they approve a game that is compliant around regulations and then that game or e-commerce solution gets updated on the fly and becomes non-compliant. Huge risk,” Sullivan said.

Bad actors have used this loophole to distribute non-compliant apps and real-money gaming apps in non-regulated markets. China and Norway both saw instances of this on a huge scale last year. Godfree explained: “Apple is introducing these new guidelines simply to protect the consumers. Apple is becoming stricter in ensuring the guidelines are adhered to so if operators choose to stay in the App Store, they should comply with the rules or risk getting a bad reputation with Apple and struggle to get their apps approved in the future. If the guidelines are not followed, existing apps will be kicked off the App Store or new ones will be rejected when submitted.”

What lotteries decide to do moving forward is a mystery, but there are no good choices. Many lotteries are already locked in a war to legalize iLottery in their own state. In addition, due to the recent Wire Act opinion, there is also a federal threat. A new problem surfacing on the private front is not welcome.