Jason Peery has firmly established himself at the forefront of the online sports betting insurance market.

But Aon’s market leader and gaming practice leader has taken quite the journey to get there.

Starting out with a master’s degree in management and engineering from the University of California, Santa Barbara, his first job was with an environmental remediation company called Regenesis in 2001.

One day Peery was sent to Los Angeles by his boss to present the company’s products to AIG’s environmental division. He impressed them so much that he was offered a job three months later.

“I put my surfboards in storage and went to work in downtown Los Angeles for the next 10 years,” said Peery. “It was a great introduction to the world of insurance that has stood me in good stead throughout my career.”

After working in underwriting for AIG, Peery wanted to get a wider exposure to other aspects of the insurance industry, so he moved on to Ace in 2005. There he worked in sales and marketing for all lines of business.

Jason Peery, CPCU, resident managing director, EVP, Aon

But his plan from day one had been to become a broker, so he moved over to the brokerage side, which is what he has been doing for the past 16 years. Starting as a junior account executive, Peery progressed through the ranks to account executive and then senior account executive at Marsh, before heading up Aon’s Newport Beach and then Orange County operations.

While at Aon he worked on the real estate portfolio, which was a natural fit given his environmental background. One of his first clients was Valley Technologies, a slot machine manufacturer, which also held video game rights and owned casinos.

“That was my first taste of the gaming space, and I’ve never looked back since,” said Peery. “It gave me enough depth to approach other companies in the space and gave me the foundation I needed, winning the accounts for Interblock and American Gaming Systems, among others.”

As the gaming industry continued to grow and Aon lost a significant part of its team to JLT in 2016, Peery and his colleagues decided to sit down and put a game plan together that would ultimately shape the future direction of the market. Combining all the different teams that worked on its gaming accounts, they formed one big national team and that team has only grown since. Today, Aon has the likes of Caesars, DraftKings, Betr and Bally’s Corporation on its books.

The online sports betting industry itself has come a long way in a short time. The Professional and Amateur Sports Protection Act, which was enacted in 1992, largely limited sports betting, with only the states of Nevada, Oregon, Delaware and Montana being exempt.

It wasn’t until 2018 when New Jersey Governor Phil Murphy signed an assembly bill legalizing sports betting at casinos and racetracks that the market really began to open up, with new online sports betting firms moving into the space and existing brick-and-mortar casino operators adding the online offering to their portfolio.

Surety Bond Solution

Despite the obvious opportunities this presented for insurers, one of the biggest challenges Peery and his team faced was the need for sports betting companies to collateralize all of the bets that are made with them in the event they can’t make good on their outstanding payouts. State regulators only accepted cash and letters of credit as collateral, which caused liquidity issues for many companies.

Looking more closely at the problem, Peery and his team realized an opportunity to help their clients by replacing the cash and letter of collateralization with surety bonds. After working to draft the bond language that would solve the collateral need, they submitted the proposal for approval one state at a time.

They had to educate both the clients and state regulators on the solution’s validity and the more states they did, the easier it became to sell the solution to them. Such has been its successful uptake that it’s now the standard approach to meeting the collateral need for each state.

“The biggest hurdle is just getting people up to speed on what surety bonds can do for them versus a cash collateral option,” said Peery. “But once you get over that, it’s all quite straightforward.”

As a result of using the surety bond solution, some of Peery’s clients have been able to free up hundreds of millions of dollars in liquidity by replacing cash and letters of credit with surety bonds, and all at a minimal cost. Now the solution is available in 18 states and that number only looks set to grow.

“It works to everyone’s benefit: As the broker, we get to create a truly unique and innovative solution that works for our client, our client gets to free up their liquidity and the states have the peace of mind that the collateralization is in place with strong financial backing,” said Peery. “It really has been a game changer on all fronts.”

Peery caveated this by saying that the solution is only applicable to big online sports betting operators with enough financial strength. But it’s surely only a matter of time before a solution becomes available for smaller firms and start-ups.

Looking forward, Peery is bullish about the future. While big strides have already been made in the space, he believes that greater things are to come in the space.

“We love what we do, we love working together in this space every single day and we are extremely proud of what we have achieved,” said Peery. “But we still have a long way to go – the largest potential states by revenue haven’t even been tapped into yet, so these are certainly exciting times to be working in online sports betting.” &

The post Online Gaming Finds a Friend in Surety appeared first on Risk & Insurance.