When looking at market share charts for the bigger states, particularly New Jersey, Pennsylvania and Colorado, the ‘others’ slice of the pie often contains a multitude of operator names that have failed to make their mark on the wider punting public.
Foremost among the names – if that’s the right word to use for brands that have struggled to establish themselves in the collective consciousness of the betting public – are many operator names more familiar to European eyes.
Unibet is a “success” story in Pennsylvania, where it has a GGR share of 0.84%. That is followed by Betway which, according to Eilers & Krejcik Gaming, somehow achieved a minus market share of 0.25 in October.
Meanwhile, in New Jersey Unibet (from Kindred), Tipico, Betway and 888 all feature in less-than-one-percent market share in the U.S., according to EKG.
The tale of the tape
European brands’ failing to register even single-digit market shares is repeated in state after state.
In Indiana, Unibet at least achieved 1% of handle in October – but zero by way of GGR. It is also doing pretty much nothing in Virginia while the EKG estimates for Arizona suggest it might claim (cue drum roll)… 1% market share.
In Iowa and Colorado, Betfred joins the club, barely registering a market share in either state.
Indeed, Colorado has become the elephant’s graveyard of failed brand-building ambitions with Betfred joined by MaximBet (from the European operator Carousel), SBK (the sportsbook of UK-based betting exchange Smarkets), Betway and Tipico.
All with operations up and running; all failing to trouble the scorers.
Tactical failures
They say in wargaming circles that no plan survives contact with the enemy and something similar might be the case with these forays into the US sports-betting market. But, not for the first time, the U.S. is teaching companies from the other side of the pond that life is different stateside.
Strategically, the U.S. sports-betting market was much too big to ignore and each likely decided the risk (and cost) of failure was worth the potential reward.
What none of them banked upon was the speed with which the top four players – and in some states the top three – would grab an outsized share of the market in each state to have opened so far.
Interestingly enough, the top U.S. sportsbooks by market share – FanDuel – is owned by Europe’s Flutter Entertainment. The No. 3, BetMGM, is a 50/50 joint venture between MGM and Europe’s Entain. And Caesars, typically the No. 4 by market share, is (in many ways) a U.S-facing skin slapped on top of what was the U.K.’s William Hill brand.
Only No. 2 DraftKings is a truly “American” brand, but the Boston-based operator too has and continues to benefit from European tech and expertise.
Strategic mistake
To reverse the oft-mentioned saying, the market openings we have seen so far have been sprints, not marathons. In this, the Europeans can be seen to have been culpable in believing their experience of European markets would be replicated in the U.S.
Back in Europe, it is still possible to claim a sizable enough market share even if you are late to the party. However, the U.S. sports-betting market has likely surprised everyone with the speed with which the early market leaders not only succeeded in grabbing outsized market shares but also held on to them in the face of a furious marketing onslaught.
The minor players have been outflanked and hugely outgunned. They simply cannot compete.
Staying in or getting out
Looking at each of the above mentioned, we can see a variety of reasons why the U.S adventure looked like a good idea at the time. But we can also see why there might be a raft of exits in the year ahead.
- 888 has already made something of a sacrifice by jettisoning its brand in favor of the SI Sportsbook joint-venture with Sports Illustrated. That will almost certainly entail more spending in the short term.
- Betway’s US foothold is as much about the imminent merger of the parent company Super Group with the Sports Entertainment SPAC. That alone likely means it will carry on regardless.
- Betfred appears the least invested of the names mentioned and its closely-held private ownership means a retreat would be the least stressful.
- With the German-based Tipico, it is hard to see why it has chosen to go for a U.S. presence when surely its greatest opportunity presents itself right now in its home jurisdiction. Again, a quiet exit might be the simplest solution.
- Then there is Unibet/Kindred which has made the most noise about its U.S. optionality but as per the third-quarter results, the statement is finding itself having to shout about shockingly poor KPIs.
- As for MaximBet and SBK – well, there will be a precious few Coloradans who will notice their apps are no longer available should they call it a day.
- And, maybe most interestingly, bet365 has only just waded into the U.S. market. One of Europe’s most prominent operators seems to have taken the most cautious approach to U.S. expansion despite seeming like one of the brands best positioned to take market share.
Time to call it quits
The admittance of defeat is hard under any circumstance; giving up on what will surely be the world’s biggest sports-betting market in time will be a bitter pill to swallow.
The price of staying put can likely be rationalized as being part of a wider plan or simply as a sign of their ambitions to shareholders.
But given what we know about their lack of success in making an impact to date and the increasing cost of attempting to go toe-to-toe with competitors which can measure their marketing budgets in the billions, it is hard to see that many of these market minnows will be around to see Thanksgiving next year.
