Clobbered by the highest inflation rates in four decades and the threat of recession, U.S. financial markets experienced one of their most tumultuous years in recent memory in 2022.
Possessing many of the same characteristics as tech stocks, leading names in the sports betting industry were not immune from the rout. At 2022 lows, top sports betting stocks cratered as much as 80% from their 52-week peak. Smaller-to-mid-size companies were hit just as hard, as impatient investors grew skeptical of the sports betting industry’s ability to turn a profit.
Shortly after the U.S. Supreme Court’s historic PASPA decision in 2018, numerous industry experts predicted a massive consolidation among U.S. sportsbook operators. The large-cap stocks, they predicted, would survive beyond 2025 while swallowing up smaller companies that lacked the budgets to spend hundreds of millions of dollars to grow their brands. In 2022, harsh global macroeconomic conditions hastened their demise.
RT @WPCareySchool: "As we saw with Fubo Sportsbook a few weeks ago, the companies that are choosing to shut down operations don't have a lot to offer potential M&A partners," says @ASU #SportsBusiness expert @danielwmcintosh. https://t.co/PKVhJAlkCD via… pic.twitter.com/J3lyhunZf9
— Christopher Carpentier (@CBCarpentier) November 28, 2022
As we look back on the year, ongoing consolidation across the industry was Sports Handle‘s top business story of 2022. It began in February when TwinSpires, the advance-deposit wagering arm of Churchill Downs, announced it would shut down its sports betting and iGaming division. By June, theScore announced plans to cease U.S. operations in a move to sharpen its focus on the Canadian market. Two other sports betting operations, Fubo Sportsbook and MaximBet, shuttered in the second half of the year.
While leading operators have reined in marketing and promotional spending, the top companies are still shelling out hundreds of millions of dollars in the category. The strong visibility has enabled the three leaders — FanDuel, DraftKings, and BetMGM — to maintain a stranglehold on the market with a combined U.S. share upward of 80%. Rather than bleed cash at a high rate, a number of smaller operators have thrown in the towel.
Moving forward, the entry of two major entities into the sports betting space may have effects on the industry for years to come. In October, DraftKings appeared on the verge of securing a lucrative deal for exclusivity of ESPN’s sports betting branding rights. A deal could not be reached, however, and further talks have been complicated by the return of Bob Iger as CEO of The Walt Disney Co., the parent company of ESPN. The rights to ESPN’s sports betting imprimatur will not be cheap, with gaming firm Eilers & Krejcik suggesting that a partnership may cost around $300 million a year.
“Bob’s ultimately going to have to dig in with me,” Jimmy Pitaro, ESPN Chairman, said on Wednesday of the sports betting opportunity.
“He doesn’t just look through the ESPN lens, he looks through the Walt Disney Company lens.”
(by @MattRybaltowski)https://t.co/5bleR0Eexj
— Sports Handle (@sports_handle) November 30, 2022
Elsewhere, prominent e-commerce merchandiser Fanatics spent the latter half of 2021 mobilizing a new sports betting division. Fanatics filed a trademark for its sports betting brand with the U.S. Patent and Trademark Office in the spring, then completed an application for a Maryland sports betting license regarding a retail sportsbook inside FedEx Field, home of the NFL’s Washington Commanders.
Fanatics, which is expected to go live with sports betting next year, could be up and running in 15 to 20 states by the start of the 2023 football season, CEO Michael Rubin stated. Fanatics’ ability to create “one-stop shopping” for sports betting, NFTs, and licensed sports merchandise through a single app may allow the company to differentiate itself from other sportsbooks.
Here’s a month-by-month look at the other top business stories of the year.
December
Sunday Ticket Battle Highlights Intersection Of Streaming And Sports Betting
FanDuel First In U.S. To Offer Shared Wallet For Sports And Horse Betting
Caesars Enters Growing Microbetting Market With Simplebet Deal
Chicago City Council Approves Bally’s $1.7 Billion Casino Plan
Sports Betting Regulators Seek Proactive Response To Cyber Hacks At DraftKings
State legislators and regulators are brainstorming ways to curb cyber attacks in the wake of last month's breach. @MattRybaltowski explores:
– A look at 'credential stuffing '
– The approach for new states
– Outrunning the regulators #sportsbettinghttps://t.co/Fw5NM7zrpY— Sports Handle (@sports_handle) December 15, 2022
November
What’s Next For Sports Betting At Fox Sports After Fox-Flutter Arbitration Ruling?
What Will FTX’s Crash Mean For Crypto In Sports Betting?
WATCH: Sam Bankman-Fried leaves the federal courthouse in New York after posting a $250M bail. https://t.co/5fZxx6Lis3 pic.twitter.com/PSyRdOlDVm
— CNBC (@CNBC) December 22, 2022
DraftKings To Launch Horse Racing Platform In Deal With Churchill Downs
October
FanDuel, Sportradar Sign New NBA Partnership Through 2030-2031 Season
G2E 2022: Is Sports Betting About To Resemble Uber?
Tekkorp To End Talks With Playtech, Wind Down SPAC
September
What Bet365’s Colorado Launch Tells Us About The Company’s U.S. Plans
The Robinhood Of Sports Betting: Sporttrade Promises Speed, Liquidity With NJ Debut
PointsBet Aims To Process Bets In Under A Second As Shift To In-Game Accelerates
Sportsbook Sign-Up Bonus Offers Starting To Wither Away
Is Sports Betting Less Recession-Proof Than We Thought?
August
Prophet Exchange Comes To New Jersey In Time For Football Season
FanDuel Tabs Kay Adams To Lead Rebrand From TVG Network
FanDuel officially announced the rebranding of TVG to FanDuel TV today along with various programming, including a daily morning show hosted by Kay Adamshttps://t.co/LOrS8OgUeY
— Awful Announcing (@awfulannouncing) August 25, 2022
PENN Exercises Option To Purchase 100% Of Barstool Sports
Breeding Industry Shows Resilience With Record Saratoga Sale
July
U.S. Sports Betting Industry Warming Up To Crypto, But Concerns Remain
June
PointsBet Shares Pop 20% After Susquehanna Becomes Sportsbook’s Largest Shareholder
Report: PointsBet Rejects Offer From Murdoch Consortium To Buy Aussie Division
May
Sources: Despite Rumors To The Contrary, WynnBET Is Not For Sale
April
Genius Sports Downplays Allegations Of Violating Russian Sports Betting Embargo
MaximBet Becomes First U.S. Book To Sign Active MLB Player In Deal With Blackmon
For the first time, an active MLB player and sports betting company have agreed to an endorsement deal:
Charlie Blackmon 🤝 MaximBet
Blackmon, who has played his entire career for the Rockies, is Colorado-based MaximBet's first athlete partner in any of the four major sports. pic.twitter.com/EIaBNtXAgA
— Front Office Sports (@FOS) April 20, 2022
March
Rush Street Gaming Announces CEO Succession Plan
Sportradar Halts New Operations In Russia
Sportradar Profiting As CEO Holds Large Stake in Russian Sportsbook
February
Why Are DraftKings Execs Not Buying Their Own Stock At Bargain-Basement Prices?
January
Is Midtown Manhattan Now The Sports Betting Capital Of The World?
Mixed Results With In-Game Betting Trends In First Season Of Genius Sports-NFL Deal
Soo Kim Makes Power Play To Acquire Bally’s As Sports Betting Industry Hits A Crossroads
Sportsbooks Continue To Spend Millions On Radio Advertising
New York Tough: Books Face Delicate Balance In War To Acquire New Sports Bettors
