Unless you’ve been living under a rock, you may have had the slightest notion that the machine that is online gambling has turned into an unstoppable wave of success. The pandemic certainly helped, as it did with seemingly everything based online, but its growth has been booking for the last decade.
And as the good old U, S of A starts to click on to the idea of the money that is up for grabs, many states have already cashed in and welcomed it with open arms. Many more will soon follow; it seems all but inevitable. But is it actually Americans that will be reaping the rewards or will the more experienced Europeans have an opportunity to swoop in and grab that coin from right under our noses?
The US market is huge and vastly untapped. It’s a potential gold mine to any business and you can bet that some of the big boys in gaming are going to want a juicy piece of that pie. Who’s interested, how big could the market be and could any US players ensure that all this stays put where it belongs?
Gambling in the US
2018 saw the ban on sports betting lifted in America and states were freely allowed to offer gambling at their discretion. With the American culture being so heavily influenced by sports, the opportunities for mammoth profits have seen half of the states open up to iGaming, with 39 predicted by 2025. Although sports book will be seen as the driving force of this, casino will also play heavily as an online pairing.
Just how much money are we talking could be up for grabs? Well, in 2020, the online gambling market across the globe was estimated at $67 billion, after a huge year-on-year growth. That same year, sports betting in the US alone was valued around $55 billion. With the opening of online sports only three years in, the current valuation of $3 billion is expected to blow out over the coming years with some forecasters predicting an astonishing $32 billion by 2030.
So, the US alone would add 50% to today’s market valuation. No one holds a crystal ball, but if trends continue from what we have seen, the long-term value of this industry will see unprecedented growth. So, who’s on target to collect on this bounty?
Federal Level – Comparison US vs Germany
Overall, the rules for the operators and affiliates are a bit different in the US. The bonus and deposit rules are differently structured. Reporting rules are stricter and even affiliates need a license. Unlike Germany where there are some deposit limits and national player database after all states agreed on the new framework, the US system is based on the law of individual states, and each has its own dynamic. German states reached a treaty covering all the states, while in the US there’s no such agreement on the federal level. Even free money offers listed on various affiliate sites are differently regulated.
The Pack Leaders
First to jump in on all this action was Flutter Entertainment Ltd. Back in 2018, they made a $6 billion takeover of Stars Group Inc and when combined with their existing brands, they are now the undisputed powerhouse of the industry. Their brands now include SkyBet, Fox Bet, Paddy Power, BetStars, FanDuel, Betfair and PokerStars which puts them in a very lucrative position of power.
Their launch on the US sports-betting market will be two pronged with FanDuel targeting the purer sports fan and avid bettor and Fox Bet, rounding up all the entertainment seekers whom bet more casually. By doubling up, they will see a huge portion of the market captured, much like Paddy Power and Betfair did in their native Ireland and the UK.
Close behind, other UK based gambling giants are set to make the move. Super Group, who owns the Betway brand as well as popular Spin Casino, is set to take over US based Sports Entertainment Group to allow access of their product in 10 states. Currently, they have over 2.5 million active customers, generating over $42 million in wagers a year. Their expansion into the US will a huge boost to their overall revenue, which is due by the end of this year.
Entain is looking to take their success with Ladbrokes and Coral sports book products, and their PartyCasino, to compete for market share. They already have good support north of the border with Canada seeing large growth for them in 2020.
Malta based Gaming Innovation Group have also set their sights on the US, although they are looking to focus on the casino side of the market. By leaving other big names to fight over the sports book sector, GIG believe their casino experience will see them snapple-up a huge chunk of the market, as they have done in Europe over the last few years.
US Based Competitors?
Don’t worry, there are certainly some home-grown heroes who are not going to stand by and let all this lucrative growth pour overseas. Caesars has made a huge stand on where they see themselves in the future of US sports betting with their latest acquisition of UK heavyweights, William Hill.
The $3.7 billion sale was complete in April and is huge inroads for Caesars to expand their operation into sports at a crucial time. Whilst some states will see the William Hill brand remain, others will be rebranded Caesars and the popular app to Caesars Sports. The future will see both apps merging onto one platform and over $100 million a month in cash flow freed to boost the service.
Caesars are not the only locals flying the flag. BetMGM has just announced its title as the first ever betting operator of the LPGA tour. This agreement is set to include the PGA and European tours and grant access to official Tour Partner logos that will heavily boost their 2021 market share.
BetMGM have already seen huge growth in 2021; their Q1 profits for 2021 have already eclipsed 90% of their total 2020 profits. They are on target to hit $1 billion by 2022’s close and are currently the third biggest player in the US, behind DraftKings and FanDuel, who together hold 60% of the market.
But MGM may have a further ace up their sleeve if previous attempts to purchase the Entain Group go ahead as planned. The UK bookmaker has already rejected a $11 billion offer saying it was too low. As BetMGM continues to grow, certainly that offer will be re-visited, and the number 2 spot would be in their grasp.