PointsBet caused a bit of a shock last week when it withdrew its application for an online sportsbook in Massachusetts. In an email to PlayMA, the fast-rising sportsbook and online casino company revealed why it chose not to launch in MA.
“We have chosen this path to emphasize our continued focus on our 14 live states of the US (plus Ontario) and how we can best optimize those markets which provide an immense (Total Addressable Market) for us to go after,” Patrick Eichner, PointsBet director of communications, told PlayMA. “We would like to thank the Massachusetts Gaming Commission for their consideration of our application, conducting extensive hearings, and deeming PointsBet suitable for licensure ahead of the launch of legalized sports wagering in the Commonwealth of Massachusetts.”
While there is still plenty of money to be made in sports betting, it is a low-margin business. And with FanDuel and DraftKings expected to dominate the Massachusetts online sports betting market, PointsBet clearly felt its investment in the Bay State wouldn’t yield a big enough return to make it worth it. That certainly makes sense.
What PointsBet leaving Massachusetts means
Still, it’s eye-opening to see PointsBet and BetRivers, two of the top sportsbook operators outside the Big Four (DraftKings, FanDuel, BetMGM, Caesars), not even attempt to compete in Massachusetts. It’s a reflection of the current state of US sports betting. The rich get richer. It’s also a reflection on how there’s more money to be made in online casinos.
It’s not hard to read between the lines. PointsBet’s decision to not invest in Massachusetts not only allows it to invest in states where it’s currently operating. It also allows the company to invest more in its online casino product. In the long run, that product will make more money.
Want proof? In its Q3 investor presentation, BetRivers revealed its online casino customers spent 6.4 times as much as its sportsbook customers. That trend is not unique to BetRivers, at least outside DraftKings and FanDuel.