The U.S. sports betting market is still very much finding its feet, but there are concerns that it is already too saturated. As new states launch regulated gambling legislation, more and more brands rush in and try to claim a piece of the pie. However, there are several measures in place that should hopefully slow this activity down, leading to a more even marketplace. Let’s take a look at how the U.S. sports betting market currently stands, and the opportunities for newly-launching brands.
Though sports betting has only recently been given the green light to be legalised across the United States, that does not mean that there have not been big-name brands building a presence anyway.
Prior to the overturning of PASPA, the catalyst for this rush of sports betting opportunities, one of the few places in the USA where you could legally bet on sports was in Nevada. In the gambling capital of Las Vegas, famous brands like Caesars Entertainment were able to set themselves up as trusted sportsbooks.
As regulated sports betting has launched in other states, this has allowed these household names to easily carve themselves a slice of the market. You might never have set foot inside Caesars Palace in Las Vegas, but you might still know and recognise the name. This brand recognition has worked wonders for them.
In addition to this, there has been a lot of interest from international brands too. William Hill, a casino and sportsbook operator in the UK, has over 100 sportsbooks in Nevada alone, and was acquired by Caesars in April 2021 to help grow their sports betting operations. Though it might appear that big brands like these are monopolising the U.S. market, there is still plenty of room for other brands.
Another consideration to make is the rising stars of the U.S. sports betting world. FanDuel, founded in 2009, and DraftKings, founded in 2012, have risen to become massive players in the American gambling and gaming industries despite their short histories.
They both initially offered daily fantasy sports and are now market leaders in this area. There was, at one point, a discussion of a merger between the two companies. However, it was blocked by the Federal Trade Commission since the combined companies would have controlled 90% of the U.S. daily fantasy sports market. Daily fantasy sports games are very different to sports betting, but the success of these two companies shows how influential young and rising companies can be in this market.
Both have introduced mobile sports betting operations in many of the states that have legalised and regulated sports betting. Their existing fanbase allowed them to quickly capitalise on these new markets. It is another great example of brand recognition at work, and yet there is still plenty of room for other operators to come into the U.S. markets.
Competition for Licenses
One big factor that is preventing the oversaturation of the U.S. markets is the competition for licenses. Sports betting regulation is handled at a state level in the USA. Each state has its own rules for operators. In some cases, this includes a cap on the number of licenses that can be issued to operators.
An operator must have a license from a state if it wishes to offer its odds and bets to residents legally. Though many of the licenses in capped states have been snapped up by the big brands thus far, there is likely to be a second release of licenses at some point in the future.
Many states issued their first licenses almost on a trial basis. Sports betting is a very new thing for the majority of American states. Legislators want to see how it will benefit their state, hence why they have only released a handful of licenses so far. As the benefits and the tax revenue begin to come in, it is likely that more licenses will be issued. In this moment, smaller sports betting operators will be able to make applications for licenses and take their first steps towards launching a sportsbook in an American state.
A Lot of Competition, but Also a Lot of Opportunity
From the outside, it might appear like the U.S. sports betting market is indeed saturated. There is a lot of competition from big, well-established brands. To those just touching the surface of the markets, it might appear like there is no room for a smaller brand.
However, this could not be further from the truth. This is an industry that is undergoing rapid growth. Within that, there is always room for smaller brands to gain a foothold and push themselves up to a higher position. Establishing a foothold in the U.S. markets will be a challenge for smaller brands, but it will be perfectly possible. There is a lot of competition here, but also many opportunities for a brand to grow and succeed.