Before the calendar turns to 2020, there will be four online sportsbooks in Indiana. The news of a BetAmerica launch date makes it a quartet in the Hoosier State.
Churchill Downs’ legal mobile sports betting product will start accepting wagers in Indiana sometime on Monday, Dec. 30. That’s not only in time for the new year but the NFL playoffs as well.
What the BetAmerica launch date means for Indiana
For the Rising Star Casino, this news means one-third of its plan is fulfilled. The casino still plans to launch two more online sportsbook brands under its license by Super Bowl Sunday.
Those are BetBull and SBK Sportsbook. PointsBet may also go live in Indiana by Feb. 2, bringing the total number of online operators in the state to seven.
The increased number of operators means Hoosier State bettors will have even more options. That, in turn, puts pressure on the books to offer more attractive and frequent promotions along with a more competitive product.
The introduction of BetAmerica onto the scene looks like a supplement to the open market in Indiana. It’s a little more complicated than that, however.
How DraftKings stands to benefit from the BetAmerica launch
BetAmerica represents another challenge to DraftKings’ top spot in legal mobile betting in Indiana, right? Not necessarily.
On Monday, DraftKings announced a merger with SB Tech. The new company owns the platform that many sportsbook operators use to run their business. BetAmerica is one such operator.
Because of that transaction, BetAmerica now runs on software owned by DraftKings. DraftKings will thus gain some financial benefit from BetAmerica’s operations. The complication doesn’t stop there.
SB Tech was the owner of the SBK Sportsbook brand. Again, because of the acquisition, DraftKings is now the parent company of the SBK Sportsbook.
This could position DraftKings to be the dominant operator not only in the Hoosier State but in the United States, as well. This follows up an earlier merger between FanDuel’s parent company, Flutter, and the Stars Group.
Both of the two biggest online sports betting brands in Indiana will now be publicly traded at some point next year. While there is a valid concern that these mergers create a barrier to entry that is too high for a truly competitive market, there are some advantages to a high cost of entry in the sports betting industry.
The upsides of sports betting’s high barrier to entry
In comparison to other industries, sports betting can be a low-profit business. It requires a lot of working capital to not only fund payouts and pay expenses but run promotions as well.
Running a competitive sportsbook responsibly simply requires access to a lot of funds that many companies and individuals don’t have. The high cost to get into the market ensures compliance with regulations and gives consumers confidence in the product.
There is a risk of such companies gaining too much of a market share, however. That’s why it’s crucial for companies like PointsBet to become competitive and sustainable.
It’s too early to tell how many operators are ideal in Indiana. Hopefully, the market will sort that out on its own.