MaximBet is the Latest Sportsbook to Cease Operations Amid Fierce Competition
MaximBet has joined a growing scrapheap of ambitious sports betting operators that failed to stay afloat in the competitive US market. The sportsbook wrote to all customers to inform them that it would cease operations on December 15, citing “challenging macroeconomic conditions” in an “increasingly cost prohibitive marketplace.” Players will not be able to make any more deposits or place wagers during the next month. All open bets will continue to be graded until it closes and any wagers still outstanding will be cashed out at “current fair value market pricing,” according to the sportsbook.
The story began when a company called Carousel Group launched a site called SportsBetting.com in Colorado back in 2020. Despite that home run domain name, it failed to gain traction, so Carousel Group changed tack. The sportsbook was rebranded as MaximBet after Carousel tied up a deal with the publisher of the popular men’s lifestyle title. It tied up market access deals covering Arizona, Indiana, Iowa and New Jersey, with a view to a nationwide rollout.
The company said it intended to capture “a significant share” of the US online gambling market, which is projected to be an annual $10 billion industry by 2025 and nearly $60 billion by maturity. It received $50M funding from Nasdaq-listed Chinese company ZKIN International Group to bankroll its expansion plans. However, those lofty goals never came to fruition. It launched in Indiana last month, but that proved to be a damp squib.
Nicky Minaj’s Business Savvy Power Cannot Save MaximBet
In January, the company announced it would migrate away from its proprietary software and use Kambi technology instead. That left it with the same user experience as rivals like Unibet and BetRivers. Its collapse is a blow for Kambi, which has already lost DraftKings as a client and will bid farewell to Barstool Sportsbook next year.
Five months later, Award-winning rapper Nicki Minaj has signed a deal to become MaximBet’s global brand ambassador. She also invested in the sportsbook and became the creative director of Maxim magazine. “I don’t think I've ever been prouder of a collaboration,” said the Trinidadian songwriter, who has sold more than 100 million records worldwide. “Merging business savvy power moves with my natural, creative, sexy, fun, and fashion-forward expression is just so spot on as it relates to this partnership. I’m ready to fully step into my potential as a young, influential Queen, and owner and open doors for others to dream big.”
However, the addition of Minaj failed to generate the requisite momentum for MaximBet, which is now the latest sportsbook to fall by the wayside. Churchill Downs has already pulled the plug on two sportsbooks – BetAmerica and TwinSpires Sportsbook, which were both powered by Kambi – and fuboTV recently shuttered its Fubo Sportsbook brand. Meanwhile, Penn Entertainment pulled theScore Bet out of the US market to focus the brand solely on Canada.
Consolidation Gathers Pace
Sports betting operators have been locked in an arms race over the past few years, investing heavily in promos in a bid to carve out market share. That has seen FanDuel pull away from the chasing pack and establish itself as the clear industry leader, followed by DraftKings, BetMGM and Caesars Sportsbook. They are now the big four, and smaller sportsbooks may struggle to keep pace with them, as they dominate the handle in each state.
BetRivers and WynnBET are still going, while PointsBet’s differentiated offering should leave it in good stead. However, Unibet’s expansion has fizzled out and even Bet365 – the global market leader – has been unwilling to get involved in the arms race. The demise of MaximBet may also bode ill for SI Sportsbook – launched by 888 Holdings in partnership with Sports Illustrated after its flagship 888 Sport brand flopped in the US – as it has a similar approach, although there is still time for SI Sportsbook to thrive.
FanDuel’s Competitive Advantages Shine Through
This industry consolidation is great news for FanDuel, which can eventually shift its focus from pursuing market share to seeking a profit. This week, London-listed parent company Flutter Entertainment hosted a capital markets day. It revealed that FanDuel has a 42% share of the online sports betting market in the US.
“This leading position is underpinned by a range of sustainable competitive advantages, alongside access to unique benefits enabled by the Flutter group,” said the firm in its presentation. “We are confident in a path to a 2030 total addressable market of more than $40 billion in gross gaming revenue, which represents growth of 4.5 times the size of the market today.”
The company is still licking its wounds after a failed attempt to legalize online sports betting in California. However, it expects sports betting to be legal in states covering 80% of the US population by 2030, up from 35% currently. That may require California, Texas and Florida to pass legal sports betting measures, as they are the largest states and they do not currently have online wagering industries.
Just Three US Sportsbooks Have Double-Digit Positions
In the presentation, Flutter Entertainment noted that there are 59 different sports betting operators in the US – 58 now that MaximBet has collapsed – but that only three have double-digit share positions: FanDuel, DraftKings and BetMGM. FanDuel chief executive Amy Howe said that “almost 90% of the operators have a sub-2% share of the market,” and that it will be hard for them to challenge FanDuel. The next step is for the company to turn that market share into a profit, and it believes it can achieve a gross win margin of 12% by 2025.
“The US market represents the single biggest opportunity in our sector today and we are proud to own FanDuel, the premier asset within this market,” said Flutter chief executive Peter Jackson. “The business has transformed the Flutter Group, performing better than we could have hoped and growing tenfold since PASPA [the Professional & Amateur Sports Protection Act] was repealed in 2018.”