Can International Betting Sites Break Local Dominance in the US?

As online sports betting continues to grow in the US, more international sites are branching into the country, hoping to break the local stranglehold in the market. The sports betting market in the United States is still relatively young, but the seat of power has already been established.

FanDuel is the main force in the country, with DraftKings, Caesars and BetMGM completing the top order. Prior to the post-2018 sports betting expansion, FanDuel and DraftKings were already household names in the US, thanks to their work in the Daily Fantasy Sports vertical.

They have leveraged on their previous popularity to make a seamless transition into the sports betting market. Caesars and BetMGM were also quite familiar with Americans, having also established themselves in the entertainment and hospitality business.

While these big names had some sort of headstart in the US, most of the other bookies have had to start from scratch. Competing against the established order in the US is not easy. International sites have often had to think out of the box to gain the attention of the public and turn eyes away from the more recognised FanDuel and DraftKings.

British heavyweights Bet365, for example, have designed what is arguably the best new customer bonus in the country, while Australian brand, ClutchBet have customized features like ClutchClash, and a unique ClutchBet bonus offered to new customers across five weeks.

Despite all of that, they are still some way behind in the notoriously challenging American market. Following the landmark ruling by the Supreme Court in May 2018, the emerging American market is seen as the golden goose of international sports betting.

That famous pronouncement by the apex Court struck down the Professional and Amateur Sports Protection Act (PASPA), which had hitherto banned sports betting in the majority of the United States. With PASPA gone, individual states were handed the authority to make their own sports betting laws.

While some states are still yet to legalize sports wagering, more than 30 American states now allow betting on sports in one form or the other. Over the last half a decade, the American sports betting market has grown exponentially, and many international sportsbooks have been keen to earn a share of the pie.

However, the American market is incredibly difficult to navigate. Gaining market access to the US is not as straightforward as it is in many other countries where general federal laws govern the industry. In the United States, the different states make their own betting laws, and the rules can vary wildly from state to state.

Hence, it is very rare for an international betting site to do an elaborate multi-state launch across the US. What usually happens is that they enter the market via one or two states, and consequently expand into other states as they find their feet.

A perfect example of an international site looking to slowly work its way up the US ladder is ClutchBet. Originating from Australia, ClutchBet entered the US via Iowa in the second half of 2022, and did not move into a second state until June 2023, when it launched in Colorado.

Even the mighty bet365, despite being the major force in multiple geos across the world, are taking their time to work out the United States. Currently, bet365 is legal in only five US states – New Jersey, Colorado, Virginia, Ohio and Iowa. Another global giant, betway, is only currently legal in seven states – Arizona, Colorado, Indiana, Iowa, New Jersey, Ohio, Pennsylvania and Virginia.

There is also the issue of high licensing fees and tax rates. These also vary by states, with many states demanding six to seven figure sums just to give out their licenses.

The most extreme cases are Pennsylvania and Massachusetts, which have set their fees at $10 million and $5 million respectively. As for sports betting taxes, New York and Rhode Island lead the way with 51%. So what does the future hold for international betting sites in the US?

With FanDuel alone currently controlling about half of the US market, and the likes of DraftKings and Caesars going fairly OK, there isn’t much left for the rest of the competition.

Some sportsbooks are already feeling the heat of the competition, and have had to rethink the profitability of their US ventures. 

One of such bookies is Australian brand, Pointsbet, which recently agreed to sell its US division amidst the intense competition in the US market.

Since entering the American sports betting market in 2018, Pointsbet has thrown quite a lot at the US, expanding into as many as 14 states. While the company has had reasonable success, it has mostly operated in the higher end of the midfield, just below the top order of the industry.

With the revenue not quite in sync with the expenses, the company has decided to pass on the project to new owners. If that US top order is going to be broken by any of the upcoming bookies, it is going to require a lot of time, patience, good strategy, and of course, plenty of money.

They have to invest heavily in high-level marketing, and partner with major US personalities, sports teams and leagues in order to improve their brand visibility. 

Eventually, only operators with huge financial outlays will make the cut on a grand scale. Of all the international brands in the US, bet365 arguably has the biggest financial muscle, and is best placed to challenge the local brands in the long term.

As for the smaller operators, they may have to play the game of percentages and pick their battles. They don’t have to be in every US state in order to run a profitable sports betting business. Except you have plenty of money to throw at the market, it wouldn’t make much sense attempting to compete with FanDuel and DraftKings.

The smarter option may be to break into states with relatively low licensing and tax fees, invest heavily into marketing and partnerships, and then look to scale up from there. While not every operator will get to the level of FanDuel, there is enough room for everyone to enjoy a good slice of the American betting cake.