Bet365 has entered into an agreement with Churchill Downs Incorporated to gain online sports betting and iGaming market access in Pennsylvania.
Bet365 in the US: A slow burn
The state will be the fourth US market bet365 has entered, after launching operations in New Jersey in 2019 and subsequently entering the Colorado and Ohio markets in September 2022 and January 2023, respectively.
Bet365’s seemingly cautious approach in the US since the widespread adoption of sports betting – compared to other brands which have launched operations in dozens of states – has raised eyebrows across the online gambling industry, leading many to conclude this “sleeping giant” has been biding its time before going full throttle in the country.
What they said
The deal is consistent with Churchill Downs’ strategy to exit the online sports and casino business, instead opting to monetise its market access rights and focus on growing its TwinSpires online horse racing business, the casino and racetrack operator said.
“Off the heels of our launch in Ohio, we are thrilled to announce our partnership with Churchill Downs Incorporated,” added a spokesperson for bet365.
Churchill Downs CEO Bill Carstanjen: “Our relationship with bet365 enables us to maximise the value of our company’s sports betting and iGaming market access in Pennsylvania.”
“Once live, the world’s favourite online sports betting brand will be available to sports fans in Pennsylvania, offering fantastic site features, including Bet Boosts, Same Game Parlay, Cash Out and Edit Bet, on top of our market-leading sign-up offer.”
Churchill Downs CEO Bill Carstanjen said: “We are pleased to partner with a global leader in the online gaming industry. Our relationship with bet365 enables us to maximise the value of our company’s sports betting and iGaming market access in Pennsylvania.”
Ramping up efforts
As part of a series of 2023 predictions sent to subscribers, Eilers & Krejcik Gaming (EKG) said bet365 was “on course to expand significantly its US footprint in 2023 with multiple state launches,” while suggesting the firm could also “surprise via M&A.”
EKG – which regularly tests a variety of products from across the online gambling sector to compare the offerings of major businesses in the space – added that bet365 “has the strongest product in the most competitive OSB market in the world (the UK)” and will therefore “challenge for podium position in our US OSB app rankings as it further localises its US product.”
As the battle for customer acquisition in the US turns into the battle for customer retention, a differentiated product may make all the difference when it comes to holding onto repeat custom.
Bet365 is world-renowned for its proprietary technology and exceedingly popular user experience.
According to financial information recently provided to Companies House in the UK, the operator generated revenue of £2.85bn in the year ended 27 March 2022, giving a year-on-year growth rate of 2.3%.
According to Regulus Partners’ Paul Leyland’s analysis of the results, however, what appeared to be a slow rate of growth in fact belied a more impressive performance for the brand, which saw an increase of nearly 50% in its number of global active users during the period.
With the financial results normalised to account for unusually high sports betting margins during the comparable period, alongside a bad run of results combined with “aggressive” bonusing in the second half of FY22, Regulus estimated a more generous 15-20% growth rate in sports betting revenue for the firm.
The operator’s new agreement with Churchill Downs is still subject to regulatory requirements. It is not yet clear when the brand is expected to officially launch in Pennsylvania.