Should European Sports Betting Operators Invest in the American Market?

European Sports Betting Operators

The American sports betting market continues to generate plenty of hype and excitement, with stakeholders constantly talking up the potential of the industry.

It is not often that the United States lags behind the rest of the world in any discipline, but that’s exactly what has happened with the legalization of sports betting.

Up until 2018, sports betting was illegal in most parts of the country, but a landmark ruling by the Supreme Court in May of that year lifted the restrictions and empowered individual states to legalize (or not) sports betting.

While states like New Jersey were quick to pounce and pass a bill in favor of betting, other states have not been so keen.

Till today, there are still more than 10 states, including California and Florida, that have not legalized sports wagering.

That has not slowed down the growth rate of industry in the country, with betting-legal states continually churning out record numbers year-on-year.

According to the American Gaming Association report on commercial gaming revenue, the gross gaming revenue for sports betting peaked at $7.5 billion in 2022, smashing the record from the previous year.

And in terms of actual money wagered by American bettors, that number stood at a staggering $93.2 billion in 2022, $36 billion more than the 2021 value.

In May 2023, exactly five years after the Supreme Court ruling, the AGA also revealed that Americans had wagered $220 billion during the five-year period.

These numbers are only going to keep rocketing through the roof, especially with more states likely to legalize in the coming months. In 2023 alone, Ohio joined the betting trend in January while Massachusetts followed in March.

With all of these incredible numbers flying around in a market that is nowhere near its full potential, it is very tempting for sports betting operators to rush into the country and grab a piece of the cake.

Some European-based companies like Betfred, Bet365 and Unibet have already set foot on the land, but what are the prospects of fending off their indigenous rivals and attaining real success in a highly regulated and competitive market?

In terms of quality, there is no doubt that European bookies can match and better whatever their American rivals have been up to. Some of these European bookies like betfred boast decades of experience, and know how to fashion betting features like odds, markets and bonuses to attract and satisfy their customers. In fact, the betfred and bet365 bonuses are currently ranked amongst the very best betting bonuses in the US.

However, winning the American market takes a lot more than bonuses and odds.

Breaking into the US is challenging in many ways, not least because of the absence of a general federal license.

Navigating the legal and regulatory requirements in one American state is sometimes more tasking than getting an operating license for an entire country anywhere else in the world. Now imagine doing this for more than 30 different US states.

The licensing fees and tax rates in many US states are quite high, with New York, New Hampshire and Rhode Island collecting over 50% tax for online sports betting. The license fee in Pennsylvania is $10,000,000, while that of Massachusetts is $5,000,000.

The financial outlay does not end with licensing and tax. Aggressive marketing is also required if the operator is to make any inroads in the market. It is indeed a long hard road towards breaking even, and eventually making profit.

Expectedly, American operators currently dominate the market, with FanDuel owning close to 50% of the market share. DraftKings joins FanDuel as America’s Big 2, with Caesars, BetMGM and Barstool also controlling a reasonable portion of the market.

It will not be easy to unseat these local brands.

So as juicy as the American project looks on the outside, is it really worth investing into?

It all depends on the financial muscle of the company. If there are enough finances to cover the licensing and marketing budget, then it’s definitely worth going for. Emphasis here is on marketing, given the early dominance of American brands.

There is room for new foreign brands in the US, but more than in any other market in the world, success in America is very capital and time intensive.

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.


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