Stadium screens in Las Vegas show on-going and completed American Football games, proving that Americans watch sports while placing bets on them legally.After the US Supreme Court nullified a ban that aimed to keep sports free from corruption in 2018, seventeen US states legalized sports betting.
Several local and international betting companies have rushed to grab a market share. Investors are putting their money into anything that looks promising.
The developing US online sports betting industry is expected to expand to about 40% annually according to Goldman Sachs, with an estimated worth of $US40 billion by next year. Similarly, the online gaming industry will probably witness a similar growth, and this can be seen with the ever-increasing number of reference sites guiding punters to choose the best providers.
The first three years of legalized US online sports betting were exciting, but now operators and investors realize that they have a long, tough battle ahead.
Decline in Share Prices
PointsBet, an Australian operator, launched to grab a big slice of the US market. The operator is available in Iowa, New Jersey, Illinois, Indiana, Michigan, Colorado, Virginia, and West Virginia. PointsBet has plans to go live in 11 more regulated US markets.
In mid-2019, PointsBet shares were worth $2 on the ASX. In February 2021, the share value hit a high of $15.89. In December 2021, they plummeted to $6.72, dropping the company value to $1.8 billion.
DraftKings, America’s biggest listed betting company experienced a similar decline in share value. BlueBet, the local bookmaker, had a value of $1.14 per share on the ASX. In August, share prices shot up to $2.86 only to fall back to $1.34.
Intense Competition Among Rivals
The decline was because of intense competition among licensed bookmakers at the beginning of the NFL season.
For example, Caesars tried to defeat its rivals by offering a free bet of US$7500 to new players. The marketing expenses of PointsBet also increased. As a result, its share price fell in all US states in the quarter of September. The operator’s share value halved to 4% in NJ, its biggest market.
PointsBet aims to claim a 10% share of the market in every US state it operates in, and experts feel that it can achieve its aim because of its high-quality product. The operator gives customers more betting opportunities than most of its rivals.
US Betting Market Continues to Grow
The last six months have been bumpy for the US online sports betting industry. But Matt Davey, the Australian gambling entrepreneur, says that the US presents a floodgate of opportunities for betting companies with several years of experience in Europe and Australia.
Davey also observes that the US betting market is growing fast because US bettors, including those who regularly play at offshore online sportsbooks, are drawn to attractive offers and products from US bookmakers.
The US betting boom is also because of broadcasters who want to profit by making sports ads exciting for a larger TV audience. Davey says that sports betting has already proved its ability to engage audiences in meaningful ways.
Fixed Odds Betting to Arrive in the US
BetMakers’ US wants to add fixed-odds betting to the existing pari-mutuel betting in the horse racing industry. The company will also supply back-end technology to bookmakers, regulators, and racetracks.
New Jersey will introduce fixed odds betting this month, and other states may soon follow in its footsteps. Fixed odds betting has the potential to revive bettors’ declining interest in horse betting.
According to Davey, the US sports betting market requires three or four more years to become stable. When the market stabilizes, there will be several acquisitions and mergers.
