Online gambling has legally been available in some countries for over 20 years but that is not the case for the United States. The US has an interesting history when it comes to online gambling and we will look at that in more detail shortly. At the time of writing, online gambling is legal in the US and online gambling companies are battling to become the number one brand in the country.
History of Online Gambling in the US
Before we look more closely at the brands leading the way in the battle for online gambling in the United States, it is important to consider the history of online gambling. In fact, the history of online gambling may have had a role to play in the position of some of the brands in the industry today. The history of online gambling in the US can be traced back to 1992 and the Professional and Amateur Sports Protection Act (PASPA). The law went into action at the beginning of 1993 and all but four states were banned from introducing any new forms of land based sportsbooks and online gambling related to sport.
Fast forward to November 2002 and the Federal Wire Act was introduced, with the focus on the banning of sports betting. The Unlawful Gaming Enforcement Act was passed in 2006 and this made it illegal to deposit and withdraw funds from the gambling sites. This act did not make online gambling illegal but stopped gambling companies from processing payments. However, attempts to hold back the emerging online gambling scene was not working as people started to use offshore online casinos and sportsbooks for their betting enjoyment. All licensed and regulated offshore sportsbooks were legal under US government law as PASPA did not mention the use of offshore companies. With so much money leaving the country thanks to people using offshore sportsbooks and casinos, attention began to switch from why online betting should not happen in the US, to why is online betting available in the US but with no benefit to the country?
Thanks to the attempts by the State of New Jersey to legalize sports betting, PASPA was eventually repealed in May 2018 and this allowed each state to regulate their own online gambling. While the repeal process was in place, Delaware, Pennsylvania, Mississippi, and West Virginia were busy passing legislation ready to legalize sports betting as soon a decision was made by the Supreme Court. Since the PASPA repeal, online sports betting has been made legal in several states and each year, additional states are making moves to legalize online gambling.
The Rush to Enter the US Market
With PASPA repealed, the race was on for companies to enter the legal online gambling market in the United States. Some offshore companies were already popular in the US before the changes in legislation and they used their presence to move quickly. Bet365, Unibet, and Betway are all examples of offshore online gambling companies who stepped in for their share of the market. Big American gambling companies, including Caesars and BetMGM, entered the online sports betting market and it did not take long for the new industry to become competitive.
Interestingly, there were to two companies who were better placed than most to make a swift entry into the online sports and casino gambling market. DraftKings and FanDuel already had a semi gambling presence online before the repeal of PASPA in 2018. FanDuel provided online daily fantasy sports games where people could bet money on the outcome of events based on the performance of individual players. FanDuel used a loophole in the laws to offer online fantasy sports games and were already well established in the US by the time PASPA was repealed. FanDuel also introduced an online casino and this is currently available in five states across the US.
Competition is rife between online operators, with many offering hefty sign up offers, usually linked to promo codes such as the one from FanDuel, where players can take advantage of a welcome offer to join the casino in the hope they stay and play regularly. However, online sports betting is where FanDuel and other fantasy sports operators have really worked hard to use their initial fantasy sports base to expand. The FanDuel sportsbook is currently available in over 18 states, making it one of the most readily available online sportsbooks in the US. Recent states to launch sports betting include Maryland, Ohio and Massachusetts is tipped to next to offer online sports betting.
It’s not just sports bettors who have been following gambling operators activities, keen investors have also been watching the markets with a close eye. Stock in DraftKings and MGM has attracted a lot of investor attention.
The Current Competition
The competition for online gambling in the US is huge and there are many options for both sports betting and casino games. BetMGM, the online brand of MGM resorts international, Caesars Sportsbook, SugarHouse, DraftKings, Unibet, BetRivers, Hard Rock Casino, Stars Casino, Tropicana, Virgin Casino, Golden Nugget, Borgata Casino, WynnBET, and Hollywood Casino are just some of the brands competing for attention in the online gambling market. Thanks to the huge competition, many brands opted for an aggressive bonus policy, with some huge promotions to tempt new players.
While the value of the odds, available sports, choice of slots, and selection of real dealer games, are all key considerations for online gamblers, the temptation of a large bonus is difficult to ignore. However, the size of bonuses have started to fall in recent times and this is because they are leaving online gambling companies out of pocket. Many people are using the bonuses and not returning which means the offers are not working in terms of gambler retention.
Could the competitive nature of the online gambling market in the United States be to the detriment of all the companies involved? A look at recent share prices of some of the major players in the US online gambling sector shows there have been a lot of ups and downs over the past year. Could the battle for online gambling in the US be having a negative effect on the value of the whole industry? Every brand wants to be at the top of their industry and leading the way in terms of popularity and revenue but there is always a danger the market could become oversaturated.
As of February, there have been at least ten new online casinos to enter the US market in 2023. These are not all licensed in the US and many are offshore casinos but they are legally offering their services to people in the United States. With so many new online gambling sites hitting the US gambling sector, there is a danger the battle for online gambling in the US could get out of control.
