America has always had a bit of a strange relationship with gambling. From an outside perspective, America seems to be the gambling capital, with Las Vegas being famous the world over. The truth, however, is drastically different. A lot of states made casinos illegal, which is partially the reason for Las Vegas’ reputation. More relaxed gambling laws made Vegas and other special locations within the US like Atlantic City in New Jersey famous for decades across the continent.
A Look Back at US Gambling Laws
In addition to strict casino laws, sports betting was illegal on a federal level until 2018 when a vote overturned it. Even then, it was left to the individual states to decide whether to legalise sports betting and even in 2021 it’s still illegal in some parts of the US. In states where sports betting has been legalised, there’s been a huge gold rush for operators to open both in-person sportsbooks, but also create apps to tap into the ever-growing mobile market. Companies are falling over themselves to create sports betting apps in order to get in there as the first, and some big names have already come out on top.
Big Names Within The Betting Industry
MGM has long been a big player in the casino space – it’s one of the most recognisable names on the Las Vegas strip with these properties alone turning over $1 billion per quarter. When sports betting was legalised, Irish gambling giant Entain entered into a joint partnership with MGM to create BetMGM. BetMGM is now one of the biggest sports betting companies in North America. As well as online sports betting, MGMBet has a mobile app that’s available in all states that have legalised sports betting. MGMBet has already predicted a net profit of $1 billion in 2022, so it’s clear that the big names behind the new venture are having an effect.
Entain is one of the UK’s biggest sports betting and casino brands. Responsible for bookmakers like Ladbrokes and Coral that are household names, and online casinos and bingo companies like FoxyBingo and Gala, the company were already hugely successful in their own right. All of their biggest brands have their own apps so it’s something they’re experienced with before entering the US market. The UK branch of the company brought in £1.59 billion last year, and that’s without what they made in partnership with MGM.
Do These Brands Work Well Together?
The Entain and MGM partnership hasn’t worked for everyone though. In 2021, DraftKings entered talks to buy Entain in a move to break into the UK market. DraftKings is a huge name in North America, offering fantasy gaming and it’s also one of the smaller players in sports betting. Despite an annual revenue of $1.24 billion, DraftKings actually ended up with a $1.2 billion loss last year. If DraftKings had gone ahead with their $22 billion offer for Entain, it would’ve potentially helped them to climb out of the red as well as securing the UK market and using Entain’s experience to help bolster their attempts to become a major player in the US sports betting market.
Unfortunately for DraftKings, there was an issue with conflict of interest. MGM and Entain’s partnership in BetMGM meant that MGM had to give approval for a sale to go ahead. While there wasn’t a specific reason given for the deal falling through, it’s possible that MGM wasn’t happy with Entain being sold to one of their biggest competitors for the US sports market – particularly as MGM had already made an offer to buy Entain for half the price that DraftKings had offered.
After the deal with Entain fell through, DraftKings said that they were intending to focus on growing their North American market share, and so far it looks as if they’ve been successful. The potential merger with Entain bolstered their share price by almost 7% and it’s had a positive effect on the company even though the deal fell through. This quarter DraftKings recorded a revenue of $298 million compared to $71 million in the previous year – a 297% increase. With numbers like this DraftKings might finally stand a chance at climbing out of the red.
From the huge numbers that BetMGM and particularly DraftKings are seeing, it’s clear that the North American sports betting gold rush is still very much just getting started. It’s likely that we’re going to see more players attempt to enter the game and capture even a small amount of the sports betting market as more states move to legalise in the next few years.
Whilst active in the US many companies also operate mobile betting apps in the UK that allow punters to play a range of games via their mobile phone.
The Future of Sports Betting in the US
As the US has had a chequered past with sports betting it is hard to know what the future is going to be, however recent changes to legislation shows that the US is certainly becoming more open to the betting industry there. Much like the UK, betting apps are starting to become more popular, as players recognise them as an easy way to place a bet. For the casino industry, ease of betting is a must as it is that which helps encourage players back to place multiple bets – and hopefully encourage their friends to do the same.
As the sports betting app industry begins to open out in the US we’re likely to see different methods of regulation introduced. Although it is reasonably likely that many of these rules will follow the same pattern as places such as the UK, this will depend largely on how the US market reacts. Regulations tend to follow trends of how gamblers are participating, as they do their best to keep those who place bets safely and the gambling industry a fair place to be. For example, with a growing trend in people using online slot machines in the UK, the most recent regulations brought into play by the UK Gambling Commission cover this – with restrictions on how much can be spent at one time and clear guidelines on what casino platforms must show to their players.