Analysis: Will Bet365 Ever Make A Splash In US Sports Betting?

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To the average US sports bettor, the name bet365 means relatively little.

New York Yankees fans might have seen the logo out in center field, advertising an NJ sportsbook. But that kind of exposure is still limited, with bet365 live in just one state.

To US sports betting executives, however, bet365 is potentially a looming threat.

Mysterious moves by 365

So why has bet365 been so quiet in the US? And will it be changing tack anytime soon?

For starters, it has done more than “almost nothing.” The company is live in New Jersey and licensed in Colorado. It has a deal in Texas with the San Antonio Spurs that could extend to sports betting when legal.

“Bet365 is the biggest enigma in sports betting,” said one US sportsbook exec. “Here is the one company that could seriously come in and compete on the top tier. They’ve got limitless cash flow coming in from every corner of the globe. And yet they have done almost nothing in the US.”

One industry source suggested bet365 has signed other market access deals and simply not made them public.

New York stumble for bet365

The operator also made a big play in New York, investing $50 million in Empire Resorts back in 2018 in return for an NY license. But that deal was ultimately rendered moot by former Gov. Andrew Cuomo’s New York sports betting framework.

Bet365 then became the first operator to miss out in the New York bidding process, per bid documents.

The NY Gaming Commission identified bet365 as a “qualified applicant.” However, adding the operator to the market would have dropped the tax rate from 51% to 50%.

To that end, the commission could not prove that adding bet365 to the market would “expand mobile sports wagering and increase aggregate revenue to the state.”

But does that failure in New York mean bet365 could just shelve its US plans? Or is the company simply biding its time?

Softly, softly, catchee monkey

Patience is one of the few edges bet365 has in the US. Competitors might have massive casino footprints or a DFS customer database, but they also have shareholders to appease.

Bet365, on the other hand, is privately held by the UK-based Coates family and takes a long-term view. It also knows precisely the economics of a sports betting customer.

“They are very shrewd and they know the value is not here yet,” said Peter Nolan, a sports betting industry consultant. “The unit economics of some of these US deals don’t make sense. They are being done for share prices, whereas bet365 makes so much money elsewhere, they can afford to wait.

“The US market is quite small compared to the amount of money they’re taking out of Europe, Latin America and Asia.”

Is froth being wrung from US market?

If bet365 is waiting for a more sane market, it might not have to wait too much longer. Share prices of some US-listed operators are down more than 60% in the last year.

Wynn is reportedly trying to get out of the sports betting business altogether. The value of its Interactive business reportedly has fallen from $3 billion to a reported $500 million.

But that downturn has not yet bled over into the market itself. Operators are still throwing thousands of promo dollars at customers in New York, despite essentially paying 51% tax on their own money.

Market-access costs in new states like Ohio are also as exorbitant as ever, industry sources said.

That could mean bet365 bides its time for another couple of years yet.

US sports betting 2.0?

In the meantime, though, the market is also maturing.

Players are becoming more discerning, picking books based on the user experience rather than bonuses. Players also trend towards mobile and in-play betting, where bet365 thrives.

Too little, too late for bet365?

But has bet365 already left it too late?

“I think the ship has sailed on this one,” said one US sports betting exec who asked not to be named. “You have really large well-capitalized brands focused solely on the US market. If you want to be successful, you need to be in lots of states for the economies of scale.

“How does bet365 compete with all the marketing that has been done by the likes of FanDuel, DraftKings and BetMGM?”

Lessons from Down Under?

The exec points to Australia, where bet365 has a single-digit market share.

“They look destined for that, if not worse,” the exec said. “The bet365 name does not mean anything to people in the US.”

Australia, though, does not allow in-play betting, which makes up nearly 75% of bet365’s handle in other markets. Meanwhile, US in-play handle is growing quickly.

As already noted, the lack of name recognition in the US might simply reflect that bet365 is early in its US plans.

Big game hunting

The operator’s real push might come when keystone states like Texas, Florida and California come online, according to industry consultant Chris Welch.

“I think they will continue to focus on a smaller number of high-population states where they can get market access and refine their operating model to the US punter,” Welch said.

The firm will of course need to invest more resources and manpower into the US and localization. But it has done that successfully around the world.

“I think they’ll be a success,” Nolan said. “It just might take longer because of their brand recognition. But they have all the tools.

“The US market isn’t that complicated. You can’t just port it all across from Europe because localization is important. But it’s not rocket science. It’s just sports betting.”

That is the crux of it. Bet365 has proven itself time and again as arguably the best sports betting operator in the world. It is taking its time in the US as it waits for the market to settle.

But it will eventually make its move and you would not bet against it replicating its success from just about everywhere else in the world.