We look how ASX sports betting stocks have been performing. Picture Getty
Checking in on ASX sports betting stocks as more US states approve gambling licences
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- More US states have joined the ranks of legalised sports betting
- But as more companies enter the market, cracks have started to open
- We look how ASX sports betting stocks have been performing
In June 2018, the US Supreme Court lifted the federal ban on sports gambling, sparking a frenzy of online bookmakers to set up in US states that legalised sports betting.
Some of the early adopters include Delaware and New Jersey, both of which legalised sports betting almost immediately.
Colorado and Montana joined the ranks in 2020, followed by Arizona, Connecticut, Louisiana, Nebraska, North Dakota, and Virginia in 2021. These states embraced both retail and mobile betting.
The momentum has continued into 2022 and 2023, as Kansas welcomed online sports betting.
Vermont, while having legalised sports betting, is expected to launch online platforms in early 2024. Massachusetts and Ohio also entered the fray, showcasing the industry’s rapid growth.
Meanwhile, Florida, Georgia, Minnesota, Missouri, North Dakota, South Carolina, and Texas are actively considering the legalisation of sports betting.
But there are also states where sports betting remains off the table – like Alabama, Alaska, California, Hawaii, Idaho and Utah.
With all the go-live states combined, the US sports betting market has become a huge one with around 57% of the population now having access to legal sportsbooks.
But companies have been struggling …
Despite rapid progress however, many sports betting companies in the US, including Aussie companies like Pointsbet (ASX:PBH), have struggled to stay afloat as the cash burn incurred in running the business has proved to be too much.
These companies realise that they need scale up to be competitive in the US, because it’s a state-by-state market that needs a lot of marketing spend.
In addition, there’s been a backlash as concerns grow that sports betting could actually cause harm to society.
“We have to make sure that we don’t hook people, we don’t promote problem gambling, and we certainly do not promote underage gambling,” said Brian O’Dwyer, chairman of the New York State Gaming Commission.
Meanwhile in Australia, the government is preparing to ban the use of credit cards to place online bets.
“It does not apply to debit cards because here the message is simple: people should not be betting with money they don’t have,” said Michelle Rowland, Minister for Communications.
“We know that some 15 to 20 per cent of online wagering is currently done with credit cards, and at the same time, we know that it’s that cohort which is the most susceptible, the most vulnerable, to greater harms that arise from gambling.
“It’s for this reason that the Albanese Government has decided to act on the findings of a 2021 Parliamentary Inquiry which recommended this ban,” she said.
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The mobile-focused platform went live in Iowa in August 2022, and Colorado in April this year.
Louisiana meanwhile is expected to go live this month, while Indiana approvals are progressing with a go-live date of January 2024.
Bluebet said it entered the US market with a clearly defined, staggered strategy.
“We are well positioned to grow with the market in the US and share our expertise, as we commence phase 2 of our B2B strategy in the US to complement our B2C channels,” said Bluebet CEO, Bill Richmond.
When all markets are live, Bluebet could have access to over 20 million American consumers.
The company is also currently in ongoing discussions with potential partners for Phase 2 of its US market entry to deliver a SportsBook-as-a-Solution offering.
Meanwhile its operations in Australia have returned to operating cashflow positive in H2 after making additional tactical marketing investments in the first half.
The company has continued to gain market share in Australia despite increased competition, with Group Active Customers up 25.5% in FY23 to 66,929.
Betmakers doesn’t conduct bookmaking, but instead provides the technology that empowers racing and wagering operators.
The company has recently been embarking on a strategic restructure of its global operations and technology to normalise its operating cost base.
In the US, Betmakers has been appointed as the exclusive agent to managed fixed odds in New Jersey, the first state to approve in the US.
The Fixed Odds platform was launched on course a Monmouth Park in Ocean Port, NJ, through teller and self-service terminals as well as online in the state via Monmouth Bets.
Betmakers has recently upgraded the platform and introduced iOS/Android apps to further strengthen its fixed odds offering in the US.
It also acquired Punting Form in Australia, bolstering its reputation as global provider of B2B data and technology services for horse racing.
Pointsbet decided to cut its losses in the US and sell its US assets to Florida-based Fanatics for around $225-$333 million after admitting it could no longer compete.
The company says the cost of doing business there is expensive because it’s a state by state market.
Pointsbet has now transferred the operating businesses in the following states to Fanatics: Colorado, Iowa, Kansas, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia.
The transfer New York and Wyoming operations will take place as the applicable gaming approvals are obtained for those states.
The company intends to distribute to shareholders the net sale proceeds together with the majority of corporate cash reserves. The current estimate for the total distributions of capital is approximately $1.39 to 1.44 per share, of which $1/share has already been paid in September.
With the sale of the US business, Pointsbet now has operations in Canada and Australia. The company has said its Australia business remains up for sale, despite the company rejecting a $220 million bid from Newscorp-backed Betr in June.
Tabcorp commands roughly 25% of the online sports betting market in Australia, but says it wants to increase that to 33% by FY25 following the launch of its new TAB app.
The company has faced increasing competition at home from international bookmakers such as Entain and Sportsbet.
Currently, Tabcorp is in negotiations with the Victorian Racing Club about securing the broadcast rights to the Melbourne Cup for the next six years.
The company’s operations in the US are relatively small however, but the TAB app can still be accessed by US citizens if the US state in which the citizen resides holds a State betting licence.
ASX sports betting stock prices today:
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