Betfred, a major player in the global sports betting industry, has made the strategic decision to cease its operations in the U.S. state of Arizona, marking yet another step in the company’s gradual exit from the U.S. market. The closure comes as part of a broader trend for the company, which has already shut down its sports betting services in Colorado, Ohio, and Maryland earlier this year. The last day for new Arizona customers to open an account and place wagers was September 19, 2024, with a complete cessation of operations scheduled for November 4, 2024.
This withdrawal marks a significant moment for Betfred, which first entered the U.S. market in recent years but now appears to be focusing its attention elsewhere. In contrast to its struggles in certain U.S. states, Betfred has reported strong growth globally, particularly in its online business and international markets.
Betfred’s U.S. Exit: A Gradual Wind Down
Betfred’s exit from the U.S. sports betting market has been deliberate and phased. The company’s operations in Colorado and Ohio came to a close at the end of August 2024, and Maryland soon followed. Now, Arizona becomes the latest state to see Betfred wind down its business, with a clear timeline for closure and account management for existing users.
Customers in Arizona had until September 19 to open new accounts and place bets. The operator has given users until November 4 to withdraw funds from their accounts, at which point Betfred will officially cease all operations in the state. This structured timeline is intended to provide clarity to consumers and ensure they have ample opportunity to access and withdraw any remaining funds from their accounts.
Why is Betfred Withdrawing from the U.S. Market?
The U.S. sports betting landscape has become increasingly competitive since the Supreme Court lifted the federal ban on sports betting in 2018. As more states have legalized and regulated online and retail sports betting, major international and domestic operators have entered the fray, leading to fierce competition for market share.
While Betfred was quick to capitalize on the opening of U.S. sports betting markets, the company appears to have struggled to find a foothold in certain states. It’s possible that regulatory challenges, high marketing costs, and intense competition from larger, more established operators like DraftKings, FanDuel, and BetMGM made it difficult for Betfred to maintain profitability in states like Colorado, Ohio, and Arizona. Moreover, the highly fragmented nature of the U.S. market, where each state has its own set of rules, taxes, and licensing requirements, adds to the complexity.
The decision to pull out of these states could be seen as part of a broader strategy to optimize Betfred’s resources and focus on markets where it has a stronger presence or where regulatory conditions are more favorable.
A Look at Betfred’s Arizona Operations
Betfred’s Arizona sportsbook launched in 2022 with the aim of capturing a share of the growing sports betting market in the state. Like many other operators, Betfred offered online sports betting to Arizona customers, hoping to tap into the passionate sports culture and fan base in cities like Phoenix and Tucson.
Despite a promising start, Betfred has now decided to exit Arizona, marking the end of a short-lived venture. Customers who had enjoyed the platform for its variety of sports offerings, competitive odds, and user-friendly interface must now find alternative betting operators in the state.
For Arizona sports bettors, there are plenty of other options available, with several large competitors, including FanDuel, DraftKings, and Caesars, continuing to dominate the market. These operators have been aggressive in offering promotions, bonuses, and partnerships with local sports teams to attract users.
Betfred’s Global Success: A Strong Performance in Other Markets
While Betfred’s U.S. exit may raise concerns about its global performance, the company has posted impressive financial results in other areas, especially in its home market of the United Kingdom and in international markets like South Africa.
In July 2024, Betfred announced its financial results for the year ending October 1, 2023, revealing a significant increase in revenue and profits. Online revenue surged to £331 million, a remarkable doubling of the previous year’s figures. This substantial growth can be attributed, in large part, to Betfred’s acquisition of a 51 percent stake in the South African operator Lottostar in 2022.
Lottostar’s contribution to Betfred’s bottom line has been significant, adding £134 million in revenue and £41 million in net profit. This acquisition appears to have been a major factor in Betfred’s robust online performance, helping the company diversify its income streams and enter new, emerging markets.
Betfred’s Retail Performance: Resilience Amid Betting Shop Closures
Despite the closure of 77 betting shops, Betfred’s retail revenue grew by 3.5 percent to reach £577 million, showcasing the enduring appeal of brick-and-mortar betting establishments. The company’s betting shops remain a key part of its business, particularly in the UK, where it operates hundreds of locations.
The growth in retail revenue, despite a reduction in physical stores, suggests that Betfred has been able to optimize its retail operations, focusing on profitability and efficiency rather than sheer volume. This strategy may have involved closing underperforming shops and investing in technology to enhance the customer experience in its remaining locations.
Key Financial Metrics: Strong Growth in Revenue and Profit
Betfred’s overall financial performance for the year ending October 2023 paints a picture of a company in robust health. Turnover increased by 26 percent to £908 million, while EBITDA (earnings before interest, taxes, depreciation, and amortization) before exceptional charges rose to £117 million, up from £67.8 million in the previous year. These figures highlight the company’s ability to generate cash flow and sustain profitability, even as it navigates challenges in certain markets.
The decision to exit specific U.S. states may be part of a broader strategy to focus on higher-margin markets, both domestically and internationally. Betfred’s management appears to be making calculated moves to ensure long-term sustainability and growth, even as it makes difficult decisions about where to allocate its resources.
What’s Next for Betfred?
Betfred’s future direction seems to be focused on strengthening its online presence and expanding into new markets where it sees opportunities for growth. The company’s successful acquisition of Lottostar in South Africa is a clear indication of its intent to diversify and build a more global footprint.
As sports betting continues to expand globally, particularly in emerging markets, Betfred will likely continue to seek out acquisitions and partnerships that align with its growth strategy. At the same time, the company will need to navigate the challenges of an increasingly competitive industry, where technology, customer experience, and market access are critical factors for success.
Betfred’s decision to withdraw from the U.S. sports betting market in states like Arizona, Ohio, Colorado, and Maryland reflects the complex nature of operating in a highly competitive and regulated environment. While the company has faced challenges in the U.S., its overall financial performance remains strong, driven by growth in its online and international businesses.
Looking ahead, Betfred’s focus will likely remain on optimizing its operations and exploring new opportunities in both established and emerging markets. For U.S. sports bettors, the closure of Betfred’s Arizona sportsbook is a reminder of the rapidly changing landscape of the sports betting industry, where operators must continually adapt to evolving market conditions.