Smaller Gambling Operators Struggling in Massachusetts Sports Betting Market

Dan Favale
By , Updated on: Jun 8, 2023 12:00 AM
Can smaller sportsbooks survive in Massachusetts sports betting market?

Now that online sports betting in Massachusetts is more than one financial quarter old, the state is noticing some important trends that'll need to be monitored moving forward.

Many of these patterns in this early going focus on the user experience. How are Massachusetts sports betting clients placing their wagers? When are they processing their transactions? Which sports are they gambling on most frequently? What is the average bet placed per user? And most interestingly, where are Massachusetts sports bettors submitting their wagers?

This last question is incredibly critical, even if subtly so. Online operators forked over plenty of money in licensing fees and agreed to pay lofty tax rates in order to crack the Massachusetts market. Figuring out which outlets the state's bettors are using most will go a long way towards determining whether companies made the right call entering this new region.

For the bigwigs in the industry, this isn't really a question at all. The best and most popular sportsbooks in the United States are absolutely reaping the benefits of the Massachusetts market. They enter with name recognition, thanks to their business in plenty of other states, as well as incomprehensibly deep pockets. They can spend big on not only advertising and marketing, but also on promotional programs, all while offering higher deposit, withdrawal and betting limits.

That combination of convenience, reach and resources makes it unfathomably difficult to compete with places like FanDuel, DraftKings, BetMGM and a couple of others. And yet, a handful of smaller online sportsbooks in Massachusetts are currently trying. The problem, at least for now? These same online sportsbooks also appear to be failing.

Massachusetts Sports Betting Handle is Overwhelmingly Dominated by DraftKings and FanDuel

So far, FanDuel and DraftKings have dominated The Bay State's sports betting handle each and every month. And when we say "dominate," we really mean it. They virtually have a monopoly on the market.

Look no further than June's earning period for proof. James Gazzale of Legal Sports Report relays all the necessary details:

"DraftKings Sportsbook, the Massachusetts-based bookmaker, took nearly half of all Massachusetts sports betting dollars in June. Last month, it handled $156.8 million, or 48 percent, of the $327.3 million total Massachusetts sports betting handle. According to figures released Monday by the Massachusetts Gaming CommissionFanDuel Sportsbook handled nearly 30 percent of all betting dollars with $95.2 million in bets. Operators generated $33 million in revenue, and the Bay State collected $6.4 million in June taxes."

All in all, FanDuel Sportsbook and DraftKings sportsbooks combined to accept 78 percent of all bets placed in Massachusetts during the month of June. That leaves just 22 percent—or a total of $72 million—of the market to split among the other six licensed online Massachusetts sportsbooks: BetMGM, WynnBET, Barstool, Betr, Caesars and Fanatics, the latter of which is still beta testing.

Not surprisingly, most of the remaining business has gone to BetMGM, WynnBet and Caesars. That has left a very small piece of the pie for the rest.

At Least Two Massachusetts Online Sportsbooks Do Not Appear to be Thriving

Two of these remaining sportsbooks in The Bay State have recently reported extremely modest earnings. In June, Fanatics Sportsbooks and Betr Sportsbook combined to take in roughy $2.2 million of total bets. That's not even 1 percent of Massachusetts market share. 

That doesn't bode very well for either company. Fanatics has bet big on their sportsbook, and Betr recently announced another round of semi-lucrative funding. Here's Gazzale from Legal Sports Report with more context:

"Fanatics accepted $1.9 million in bets during June, its first whole month of online Massachusetts sports betting. The total accounted for less than 1 percent of all monthly handle in the state. The company is still beta testing its Massachusetts sports betting app, which launched before the end of May. Fanatics, which recently agreed to a $225 million offer to purchase the US assets of PointsBet, continues to test its app in MarylandOhio and Tennessee. Betr, the micro-betting outfit of co-founders Joey Levy and Jake Paul, handled $289,000 in June. It accounted for 0.1 percent of handle market share for the month. With a 4 percent win rate, Betr generated $11,500 in June revenue. The company announced a $35 million fundraising round at the end of June. In Ohio, where Betr first launched in January, it also holds a 0.1 percent market share of handle."

Two important factors stand out: Fanatics Sportsbook remains in beta-testing mode, which helps explain their microscopic market share to some degree. And as a micro-betting operation, Betr is essentially designed to churn out modest market shares.

Will Betr and Fanatics Sportsbooks Ever Grow into Bigger Massachusetts Gambling Staples

Still, even by the reserved projections outlined above, the Betr and Fanatics sportsbooks aren't leaving much of a dent in the Massachusetts sports betting scene. Might it be time for them to worry about their long-term survival?

It's a little too early to answer this question. Online sports betting in Massachusetts likely needs to celebrate its one-year anniversary before newer companies think about exiting the market.

At the same time, if we had to pick one of the two to worry about, it would be Betr. Turning in an $11,500 profit for the month of June doesn't align with industry standards, not even for a micro-betting outfit. The pressure is only going to mount following their latest round of fundraising. And given how hesitant the Massachusetts Gaming Commission was to license social media star Jake Paul in the first place, it feels like there's a good chance the company will flop or eventually be pushed out of the market.

This isn't to say Fanatics is guaranteed success. A sub-1 percent market share is nothing about which to brag. At the same time, Fanatics is somewhat deliberately repressing their early returns. Only existing Fanatics customers are allowed to access their sports betting app. They've yet to roll it out to a wider audience. Their revenue should climb once they open up their services to the rest of the state.

Granted, Fanatics could still struggle to keep pace with the FanDuels and DraftKingses of the world. But the online sports betting market in Massachusetts has exploded relative to expectations thus far. If Fanatics is willing to continue investing money in their operation, as they did with the PointsBet acquisition, it'll give them better than a puncher's chance of earning a larger share of The Bay State's gambling business.

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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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