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2022 In Review: Consolidation Of Sports Betting Industry Tops Year’s Business Stories

A host of smaller operators are calling it quits in challenging business environment

Matt Rybaltowski by Matt Rybaltowski
December 27, 2022
in Industry
Ryan Mercer/USA TODAY

Ryan Mercer/USA TODAY

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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

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Matt Rybaltowski

Matt Rybaltowski

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and CBSSports.com among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running. Contact Matt at matt@usbets.com.

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