UK bookmaker Betfred, having already pulled up stakes in several states, is contemplating a complete withdrawal of its operations in the U.S. sports betting market.
Betfred Good as Dead in the U.S.?
British bookmaker Betfred could be exiting the U.S. sports betting market after already terminating operations in several states, while others, like Colorado, will be closed for business by the end of August. Beginning in September, Betfred will only be available on its digital platform in Arizona, Iowa, Pennsylvania, and Virginia while maintaining retail sportsbooks in Louisiana, Nevada, and Washington State.
When asked whether Betfred could continue its operations in those remaining markets, Betfred USA CEO Kresimir Spajcic stated, “I truly believe that my team and I can create a sustainable business. The question is: Can you make a business profitable enough to make sense to continue operating in the U.S. versus putting this effort and investment elsewhere that might yield a bigger return?”
“The key for smaller operators is to look at every market,” said Spajcic. “Every state is a specific state. We have to see what the competitive landscape is and try to find certain assets and advantages that allow you to be competitive.”
Spajcic said he would have a clearer idea of where his company’s future lies by the end of the year and added that exiting the U.S. market is “on the table as well if we don’t have enough value that we can create within the U.S.”
Unless Betfred can renegotiate more favorable terms with its sports betting partners, allowing the company access into those states where it currently operates, Betfred may decide that the juice isn’t worth the squeeze in the U.S. and reallocate those financial resources elsewhere. Only time will tell.
Market Consolidation
Maryland Lottery and Gaming director John Martin said that Betfred and its retail sportsbook partner in the Old Line State, Long Shot’s, had reached a “mutually agreeable parting of the ways.” Martin also added, “This is not the first time this has happened in Maryland. I don’t think it’s going to be the last time.”
But Betfred is hardly the only small operator struggling. One of the most surprising exits was Las Vegas gaming icon Wynn Resorts’ mobile sports betting platform, WynnBet. The luxury properties Wynn Resorts has become famous for on the Las Vegas Strip, Wynn, and its sister resort Encore Las Vegas, were expected to give the brand a boost in the mobile sports betting market.
However, after launching in a dozen states, it has exited all mobile markets except Nevada while maintaining a property in Massachusetts, Encore Boston, continuing its retail sportsbook operations but withdrawing its mobile presence in the Bay State.
Wynn Resorts’ chief financial officer Julie Cameron-Doe cited the same reasons as Betfred for shutting down its mobile presence in several states, saying, “In light of the continued requirement for outsized marketing spend through user acquisition and promotions in online sports betting, we believe there are higher and better uses of capital deployment for Wynn Resorts shareholders.”
Other mobile sportsbooks with once lofty aspirations, such as Betway, Super Group, and PointsBet, are just a few of the other brands that have vacated the domestic market. The bottom line is that FanDuel and DraftKings have such a stranglehold on the majority of the market that trying to outspend those powerful entities for market share is becoming next to impossible.
Industry analysts expect to see more consolidation in the coming months and years.
