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What Bet365’s Colorado Launch Tells Us About The Company’s U.S. Plans

The British sportsbook giant went live in the Centennial State this month, accelerating its push in North America

Mark Saxon by Mark Saxon
September 29, 2022
in Industry
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When bet365 launched mobile operations in Colorado at the start of this month, it certainly raised eyebrows in boardrooms across the sports betting landscape, even in the executive suites of giants like FanDuel, DraftKings and Caesars Sportsbook.

For years, bet365, the most successful operator in the United Kingdom, has been viewed as a sleeping giant in the U.S., a private company that keeps its cards close to the vest while potentially creeping up on the major operators.

Colorado gave the company a second U.S. foothold, along with New Jersey, and it has been approved for a license in Virginia, perhaps just the first few dominoes to fall in the company’s North American strategy. It also is live in Ontario and has a deal in place with the San Antonio Spurs in case Texas legalizes sports betting. It tried and failed to land a license in New York, where only nine skins were available. Like everybody else, it’s keeping an eye on California and Florida.

β€œI think there are three or four companies who could come into the space and be real competitors,” said Chad Beynon, managing director and senior analyst at Macquarie Group. β€œBet365 is one of those companies. They’re well-financed, they’re successful in a market right now where there have been a lot of losses and unprofitable businesses, and it’s been hard to access capital.

“Bet365, Fanatics, and ESPN are the three companies that everyone is kind of sitting back, saying, β€˜They’re going to do something. We don’t know exactly what they’re going to do. We don’t know what the product is going to look like, but they’re going to be here.β€™β€œ

Patient, step-by-step approach

Beynon thinks bet365, if it makes the right moves in the coming months and years, could slide into the top five nationally behind FanDuel, DraftKings, Caesars and BetMGM, the nationwide leaders by handle and gross gaming revenue.

Colorado does not break down handle by operator, so it’s difficult to gauge the company’s level of success there so far, but it’s telling that bet365 signed a 10-year deal with Century Casinos to use that company’s skin. Typically, those deals are for three years, Beynon said.

Generally, an operator such as bet365 would pay $1 million or more for the right to a skin, according to Beynon, with that payment increasing if the sportsbook is able to exceed revenue targets. Bet365 and Century sealed their partnership in May of 2020, more than two years before bet365 started taking bets in the Centennial State, just in time for the kickoff of the NFL season.

Colorado, where bet365 became the 27th licensed operator, and New Jersey both have long lists of licensed operators, perhaps explaining why bet365 launched in those places, where licenses were relatively easy to obtain.

β€œWe expect bet365 to be successful in Colorado,” said Century’s vice president of operations, Eric Rose. β€œIt is very competitive and we are confident they will do great.”

Private control an advantage?

Bet365’s miss in New York probably says more about that state’s peculiar sports betting structure than it does about bet365’s strategy. The company invested $50 million in Empire Resorts in 2018 in return for potential access to a New York license, but that deal was rendered moot by then-Gov. Andrew Cuomo’s insistence that the number of operators be seriously limited and that the 51% tax rate on GGR — highest in the nation — be maintained.

Bet365 is owned by British billionaire Denise Coates, and because it is not publicly traded, it can afford to be patient with its North American plans while limiting its marketing spend, Beynon said.

That could be a key advantage over public companies that have to satisfy stockholders, especially when the stock price suffers a quarterly dip. Part of the reason for bet365’s success in the U.K. and Europe, Beynon said, is that it has created quality technology and marketing plans. That advantage won’t disappear simply because the company crosses the Atlantic.

β€œClearly, in the U.S., similar to a few other European players they’ve taken their time, but most people I talk to who are familiar with their site in London and the U.S. believe they will win,” Beynon said. β€œThey may not be a top three player, but they’re going to get their chance to be a mid-single-digit player in the U.S.”

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Mark Saxon

Mark Saxon

Mark has been covering sports for more than 30 years at stops that include The Athletic, ESPN.com, the Orange County Register, and Oakland Tribune. A Major League Baseball beat reporter from 1998 to 2021, Mark also has covered college football and basketball extensively and dabbled in nearly every other major sports league. He has been a lifelong sports gambler. He pays special attention to developments in the sports betting world in New York. Contact Mark on Twitter (@markasaxon) or via email at [email protected].

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