US Sportsbook online gambling  —  the new gold rush

Sam Silverwood Cope, 14 Jun 2019

It was morning on January 24th 1848, when sawmill operator James W Marshall was examining parts of the Californian river underneath the mill he was working on. In its bed some glistening metal caught Marshall’s eye.

The 38 year-old picked up 5 of the shiny pieces of metal and realised they were soft and could be beaten into shape, but not broken — Marshall had discovered gold.

Quickly other workers, then the whole town heard about Marshall’s discovery. Soon afterwards a local journalist picked up the story, which created a wave of news stories across America. The floodgates were opened, and more than 300,000 people decided to pack up their belongings and ventured west to try and find their own fortunes.

This man’s find and the ensuing clamour for more such finds, changed the entire financial and social landscape of the area, and brought great riches to some, (poverty and displacement to others) in the California Gold Rush.

The Gold Rush has already started

Fast forward 170 years to May 2018, the Supreme Court gave sports gambling the go-ahead to be legalised in the US. To some this news was the glistening of gold in the bottom of that river, but this time it could be a global gold-rush.

American football betting searches alone reach highs of 4m+ a month

Already in America the sports betting market is estimated to have wagers of $195bn in illegally placed bets, an eye-watering amount. It’s also predicted, according to reports sports betting could generate as much as $8.4 billion in new tax revenues, in another it stated it could create more than 200,000 new jobs culminating in a very attractive $22 billion uplift to the nation’s GDP.

One known benchmark of this is the State of Nevada, the only US state that had previously allowed sports keepers, which recorded $4.8 billion in revenue in 2017. The other states are rubbing their hands together in anticipation.

Alongside Nevada 6 further states have made sports gambling legal since the ruling:

  • Delaware
  • New Jersey
  • Mississippi
  • West Virginia
  • Rhode Island
  • Pennsylvania

… with 15 more states considering the ruling this year.

Exciting as this is for US sports gamblers to legally bet, it’s even more tantalising for gambling sites, and especially the established foreign ones.

Will we see a change in how Americans interact and react with sport? Will we see hundreds of British, Scandinavian and Chinese gambling sites flocking to the US to find their fortunes?

Monthly NFL Betting searches peak at 4m per month

The below chart (Data from Pi Datametrics US Sportsbook report) shows search volume over the last 3 years for sport gambling terms in Google US:

Chart1. Monthly online Betting Searches Google US 2015-2018

Search Volume for major US sports gambling terms in Google 2016–19

Already, even before full legalisation, American football betting searches alone reach highs of 4m+ a month, all around the time of the NFL Draft in August each year.

In fact, each category of terms in this chart has a combined search volume of 31.3m searches a year, showing already an appetite for online gambling in the US.

It’s therefore no wonder the gambling companies are now coming over to the US buying office space as well as acquiring sports content sites. There’s clearly huge opportunity to be had for online betting here, not just for US sites, but established international sports betting sites as well.

The national league’s are also thinking they can make money on this too and have mooted a 1% duty for any bets taken on their sports.

Are the Europeans gambling companies going to invade the US?

European and especially British and Irish sites lead the way when it comes to sports gambling. Not only do they have a large control over their domestic markets, but you can pretty much bet on any sporting event at any time of the day. Many have already established a US footing based on plan going back years for such a legislative move.

Plus these Euro players are cash rich and time poor, so what we may see is the bigger players buying up existing (and already performing) US sports content sites to gain editorial positioning — this way all the hard work is done for them. The M&A teams have new remits to do exactly this where $1m dollars for a small scale hockey or baseball blog is almost a daily acquisition for some.

UK Bookmaker US Gambling Share increased immediately after the announcement:

  • 888 Shares increased 15% (already operates a poker network in 3 states)
  • Paddy Power Betfair shares increased 12.2% (have a foothold online and in several states)
  • William Hill shares increased 10.7% (online presence)
  • GVC / Ladbrokes shares increased 7.6%
  • Playtech shares increased 3% (software provider)

Some of those UK bookmakers are already in the US. According to Bloomberg, last year $1bn in bets came through major UK broker William Hill’s already well established 108 betting shops in Nevada, the UK business kept $73m.

Let’s look at who is already performing in the US for sports gambling terms (Data from Pi Datametrics US Sportsbook share of voice report):

Chart2. Organic search Share of Voice – gambling terms Google US 2019

The current share of voice in Google for major gabling searches

The current main US online gambling best sites

As shown in the chart above, affiliate and content sites make up the majority of the online landscape; 20% of the top 20 are affiliates, PlayUSA.com ranking highest.

Having insight into which affiliates have the most visibility for US gambling terms is essential in choosing who to advertise with and increasing chances of traffic to your site.

Oddshark a leading tipster site packed full of content on mostly football and baseball, is already leading the way in terms of organic share. So if there are 30+m searches a month, Oddshark are seeing a large share of that with its rich optimised content. It’s ideally positioned to benefit from the large influx of legalised gambling ready to flood the US sports market.

Other major content providers are obviously there too with giants such as Fox and ESPN offering pure sports content at the moment (without the gambling angle), possibly primed for future sponsorship and advertising deals.

The Right Place at the Right Time

Together with these big players are smaller affiliate sites or just plain sports blogs, which like in the 19th century gold rush could prove that the little-man could find his riches by being in the right place at the right time. It’s pretty well known that decent content sites, sometimes run by one-person teams, could be acquired for anything from $50K to $5m dollars. The advice is, get your decent content out there now, as prior to PPC being made fully legal, the organic content sites will be snapped up.

The Modern US Gold Rush of 2019 -2020

So the laws may be passed this year to fully give the green light to legalise gambling. Will UK companies such as Ladbrokes, PaddyPower and William Hill have huge Manhattan or Las Vegas tower blocks this time next year? Possibly.

What’s certain is there is gold in them hills.

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