After Sale to BetMGM, Tipico Sportsbook Operator Exiting Iowa Sports Betting Market

Dan Favale
By , Updated on: Jul 2, 2024 12:00 AM
On the heels of selling their U.S. operations to BetMGM, Tipico sportsbook will be leaving the Iowa sports betting market.

International online gaming provider Tipico will be leaving the Iowa sports betting market after selling their United States operations to BetMGM. 

The transaction, which was announced a while ago, will impact Tipico sportsbooks in a number of states. We already covered them leaving the Colorado sports betting market. They will also be leaving New Jersey and Ohio, on top of no longer offering sports betting in Iowa moving forward.

Immediately, a few pressing questions spring to mind. The first of which is: How will this impact sports betting in the Hawkeye State? Equally important, though, we have to grapple with what this means on a larger scale. If nothing else, yet another company shuddering their sports wagering services raises the question of whether newer entrants can ever secure a big enough market share to compete with other top online sportsbooks in the United States over the long term.

Will Anything Change for Iowa Sports Betting?

Let’s tackle the most local issue first. The Iowa sports betting market is losing an operator. Conceptually speaking, this winnows down the list of options for customers in the Hawkeye State.

And yet, while this is true, Iowa sports bettors won’t be without plenty of options. After launching betting operators in August 2019, the Hawkeye now has almost 20 online sportsbooks licensed to operate in the region.

So yes, though Tipico’s exit does diminish the field, that field is still pretty big. Customers shouldn’t have to worry about seeing other online sportsbooks in Iowa worsening their betting lines or lowering the quality of their promotional bonuses. They all must still compete with everyone else. 

If anything, you might see Iowa sports betting sites start to run special one-time bonuses for new clients transitioning over from a Tipico brand. This isn’t to say the company’s sale is a good thing for incumbent clients—who, by the way, should have immediate access to BetMGM sportsbooks with their accounts. But this change, even if it’s inconvenient, shouldn’t change the landscape of Iowa sports betting services all that much.

Tipico’s Sale Underscores Massive Challenge Facing Many Online Sportsbooks

The exit of Tipico from the Iowa sports betting market will probably do more to impact sports betting in the United States at large compared to the local level. Over the past year or so, we have seen more international, along with some domestic, operators sell or shudder their services because they can’t keep pace with bigger companies.

In this case, we’re not speculating, either. It’s essentially confirmed. As Matthew Waters of Legal Sports Report wrote, Tipico was delivered a reality check after “aggressively” trying to establish itself in the USA:

“Tipico is the latest brand to exit after failing to establish significant US market share. The German sports betting leader announced its US plans in July 2020. Tipico said it would launch in New Jersey with its own platform. US CEO Adrian Vella told LSR in January 2023 that it was ready to speed up its progress. Tipico tried to appeal to locals through partnerships with live music venues and even a Cincinnati brewery. ‘We’re taking a cautious approach but an aggressive approach, investing heavily in the product, VIP and the customer. We really want to have something where the customer, they have no reason to churn,’ Vella said at the time.”

There’s no mystery behind this struggle. FanDuel and DraftKings process the vast majority of online sports bets in the United States. Other operators don’t necessarily have to catch them, per se. But they need to generate enough of a market share in any given state to remain up and running. As we continue to see, that’s easier said than done.

Is BetMGM Making a Play to Catch FanDuel and DraftKings?

To be sure, chasing FanDuel and DraftKings won’t be seen as a lost cause for everyone. After their Barstool branded sportsbook didn’t pan out, Penn Entertainment rebranded its operations under the ESPN umbrella, launching ESPN Bet near the end of 2023. Penn clearly sees value in still trying to build up a market share despite the popularity of other, more established heavyweights.

BetMGM is one of those bigwigs. Sure, they’re a notch below FanDuel and DraftKings, but they’re easily among the five or seven most popular online betting sites in the United States. For them, yes, this sale is about grabbing an even bigger share of the Iowa sports betting market. The same goes for sports betting in Ohio, New Jersey and Colorado

However, as officials within the company have noted, the purchase is also about gaining access to Tipico’s international software. “By controlling our own sportsbook technology, we ensure that we will deliver the world’s greatest iGaming experience to customers across all our markets and brands,” said Gustaf Hagman, the CEO of LeoVegas, which is a subsidiary of BetMGM.

On many levels, BetMGM could be looking to fortify their position on an international level. Controlling their own sportsbook technology will help with that. But this to some extent has to be about better rivaling the scale of reach from FanDuel and DraftKings. Especially inside the United States.

To wit: Iowa sports betting officials recently published May’s handle reports. According to the results, approximately two-thirds of Iowa online sports betting transactions ran through either DraftKings or FanDuel. And that’s a smaller share relative to other states.

Naturally, this makes you wonder whether emerging or established sportsbooks can ever compete with both of them. The answer is unclear. But BetMGM appears willing to try.

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Meet the author

Dan Favale

Dan first began writing about sports back in 2011. At the time, his expertise lied in the NBA and NFL. More than one decade, that remains the case. But he's also expanded his catalog to include extensive knowledge and analysis on the NHL, MLB, tennis, NASCAR, college ba...

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