Industry analysts detail that a lack of B2C competition and B2B deals leads to industry exodus to the Southern continent…
JMP’s final takeaway from the meetings it held at ICE highlighted the fact that there was declining interest towards the US from international companies as they either scale back or exit the market completely; as Super Group (Betway parent), Kindred Group, 888/Evoke and myriad others have done in recent times. The analysts said that despite the US being on its way “to becoming the largest online gambling market on earth (17% of the global TAM), it is currently protected by a competitive moat”.
That moat is characterised by the FanDuel-DraftKings dominance of sports betting, with one industry source commenting that high barriers to entry and marketing costs make the US “strikingly uncompetitive when it comes to bookmakers being able to compete for market share”.
The bulk of market share is split between FanDuel and DraftKings, with BetMGM, Caesars, Fanatics, Penn and bet365 fighting it out below (as shown in the download chart graph), and the situation is compounded by stagnant legalisation efforts in both OSB and iCasino.
Everyone at risk
Current bookmakers recorded around $150bn in wagers across regulated states in 2024 and GGR came to just over $14bn, but even FanDuel’s seemingly impregnable position came under threat as its liabilities on same-game parlays made it as vulnerable to punter-friendly results as other bookmakers during Q4.
And with sporting results having such a major impact, Regulus Partners said “FanDuel’s leading same game parlay mix probably exposes it more to this run of bad results, but we doubt (it) will be the only US betting revenue disappointment or profit warning”.
Meanwhile, as ESPN Bet continues to struggle, G&C’s industry contact wondered “if ESPN parent Disney was reining in marketing the brand for fear of a public backlash”, while issues of editorial integrity may also explain why the group is strangely reluctant to fully capitalise on its association with the sports media giant.
The lack of B2B opportunities for platform and sports betting suppliers has also played a part, with tribal gaming groups’ lack of enthusiasm for online being one of the clearest examples of the trend.
Tribes have shown only minimal interest in developing digital gaming portals, or, as in the case of the Hard Rock group in Florida, have only done so as they have a clear run at the market.
Given these challenges, US online operators are exploring other ways to sustain growth, including an increased focus on ‘quasi-gambling’ products such as sweepstakes, despite the ‘anti-sweeps’ campaign being wagered by some stakeholders.
International development
On the international front, Flutter is a European group (originally) and has always had sizeable ex-US activities, but MGM via its acquisition of LeoVegas has recently launched in Europe and both groups have their sights on Latin America and Brazil in particular.
They are following in the footsteps of smaller US operators such as Rush Street Interactive, which has been active in Colombia and Mexico for some time already.
But while Brazil represents a major opportunity, meaningful channelisation will have to occur for it to reach its potential, as crypto and black market operators continue to target Brazilians without the legal restrictions faced by licensed firms.
