Niche sports betting brand MaximBet became the third U.S. online sports betting site to close earlier this month, joining TwinSpires Sportsbook and Fubo Sportsbook.
The Carousel Group-owned brand, which was licensed in Indiana and Colorado, is the latest victim of contraction in the online sports betting space.
Representatives from the company have declined to comment on the decision, though MaximBet’s website currently has a four paragraph explainer on how customers can retrieve the money they’ve deposited.
“On Wednesday, November 16, 2022, MaximBet closed its sports betting operations and is no longer accepting deposits or wagers,” the company’s website reads. “Customers can withdraw any deposited balances until Thursday, December 15, 2022. Any remaining player balances after this date will be refunded via check sent to the address on the account.”
What MaximBet’s Closure Means
Industry experts, such as UNLV International Gaming Institute Distinguished Fellow in Gaming Leadership Becky Harris, don’t see MaximBet’s decision to exit the mobile sports betting space as a surprise.
Harris told U.S. Betting Report the decision by executives at companies like MaximBet, Fubo Sportsbook and TwinSpires Sportsbook speaks to policymakers drawing up wagering laws in a way that allows less established names to enter the space, perhaps before they’re ready to take on such a commitment.
“Generally speaking, I think that we are going to inevitably come to a place where there’s some contraction in the market with regard to sports betting operators,” Harris said. “How significant that is, you know, that obviously remains to be seen.”
Harris said some state laws can have an unintended consequence of opening up the market to volatility, as these less-established brands that hold licenses go under.
“They’re trying to be very, very inclusive, which I support. And so that allows an opportunity for new market entrants to come in and try their hand at sports betting operations and being suppliers and vendors and a variety of other things,” Harris said.
“And I think we’re going to find that some startups or some of those that are new to the business are going to have a challenge in finding early success in particular in the market.”
What’s to Come in U.S. Market
Both Harris and Brendan Bussmann, who serves as the managing partner of gaming consulting firm B Global, believe the cost of acquiring market share is prohibitively expensive.
That leaves niche betting brands like MaximBet exposed to getting overextended, thereby increasing the chance of closure.
Bussmann told U.S. Betting Report the demise of brands like MaximBet should be a warning sign to others that we’re looking at a “survival of the fittest” scenario in the U.S.
“This won’t be the first nor the last time that we can use the phrase ‘another one bites the dust,’” Bussmann said. “This is a very aggressive market and for survival, it is the gaming industry’s version of Hunger Games and only the best will survive at the top level.”
Bussmann said MaximBet, which is an offshoot of the American magazine that’s been published out of New York City since 1995, is another example the sports betting sector is a different beast than other industries.
The longtime industry analyst believes we’ll only see further consolidation in the U.S. sports betting sector, with the smaller brands either folding entirely (like MaximBet and Fubo Sportsbook) or being acquired by bigger names (such as the DraftKings Sportsbook acquisition of Golden Nugget Sportsbook).
“This is an example of how also a known brand may not translate into a sports betting brand,” Bussmann said. “There will be several other instances like this, as M&A (merger and acquisition) activity continues in the sector.”
Daniel McIntosh, who serves as a Teaching Associate Professor at Arizona State University’s W.P. Carey School of Business, echoed Bussmann and Harris’ comments, saying niche betting brands are choosing outright closure over traditional merger and acquisition due to a lack of assets.
“As we saw with Fubo Sportsbook a few weeks ago, what’s happening is that the companies that are choosing to shut down operations don’t have a lot to offer potential M&A partners,” McIntosh said. “The most important thing right now is market share.
“MaximBet and Fubo Sportsbook both struggled to secure market share. Their name brands themselves aren’t worth that much to their competitors as there is no brand equity or brand allegiance for either in this space.”
The U.S. mobile betting industry enters the 2023 calendar year with more markets about to come online, while also contending with further consolidation.
“Sports betting is always going to transform itself. It is never stagnated,” Harris said. “So, stay tuned for more change.”
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