.svg)
As Kindred Group’s Unibet becomes the latest sports-betting brand to announce its exit from the U.S. market, state gaming regulations that guide companies through their exit strategies have become more important.
Massachusetts, which launched retail and mobile sports betting earlier this year, is now considering a proposed regulation that would establish procedures and requirements for any operators seeking to leave the state.
The Massachusetts Gaming Commission (MGC) on Tuesday (December 5) will discuss 205 CMR 258, a proposed regulation that sets out how operators may cease operators either by scaling back their products and offerings, or by ceasing business operations altogether.
Sports-betting operators in Massachusetts would be required to inform regulators in writing at least 90 days before a shut down of operations is anticipated to occur, as well as the circumstances that lead to the cessation of operations.
The notice required shall be given regardless of whether the anticipated cessation of business is permanent or indefinite, and whether the cessation is through voluntary or involuntary dissolution, liquidation or bankruptcy, according to the regulation.
Upon receiving written notification, the commission can order the company to stop offering and accepting wagers within five business days or a longer period to be determined, or appoint a conservator to manage and operate the business until the intended closure date.
According to the regulation on Tuesday’s commission meeting agenda, within five days of providing notice of its intended cessation of activities, the operator needs to submit a plan to regulators that addresses the distribution of winnings to patrons holding unredeemed wagers.
Among a number of requirements, the plan also must outline the refunding of pending wagers that will not be paid before the operator shuts down the distribution of funds in a patron’s sports wagering account maintained by an operator to that patron and plans to satisfy outstanding debts and obligations, including excise taxes due to the commission.
“Upon cessation, a sports wagering operator shall surrender its sports wagering license to the commission, at which time the sports wagering license shall be deemed to have expired, except to the extent any obligations of the sports wagering operator to the Commonwealth, the commission, vendors, or patrons thereunder are deemed to survive,” the regulation states.
Since the launch of retail sports betting on January 31, followed by the start of mobile betting on March 10, commissioners have dealt with two sports-betting companies pulling out of the state.
PointsBet, a companied based in Australia pulled out of Massachusetts in early February after working for months with the MGC to launch a mobile sportsbook in the state.
The company’s U.S. business was sold in October for $225m to Fanatics Betting & Gaming. The company does operate Fanatics Sportsbook in Massachusetts.
Bet365 announced in January that it was dropping plans to offer mobile wagering connected to Raynham Park, a former greyhounded racetrack. The facility offers simulcast wagering on racing but still has no retail sportsbook after Caesars Entertainment pulled out of a deal in August.
Wynn Resorts also pulled WynnBET out of eight states at the end of August, although it remains operational in Massachusetts, Michigan and New York.
Brendan Bussmann, managing partner with B Global Advisors in Las Vegas, told Vixio GamblingCompliance he was not surprised by Kindred Group and other companies exiting a particular state or the U.S., entirely shutting down or selling off their unprofitable businesses.
Bussmann said the U.S. is a completely different market to others in which international companies operate.
“While you will always have an ebb and flow of smaller companies that enter the market because of an opportunity or have an interest in a specific market, the market will likely be similar to the brick-and-mortar side of the industry — a few stalwart companies with some smaller niche [operators] along the way,” Bussmann said.
Over the next few years, there are still some major markets yet to open, so Bussmann does not see the door completely closed in terms of new entrants into the U.S. sports-betting space.
“The opportunities in California, Texas, Oklahoma and others still have challenges for how those markets will shape up and were the alignment lies with specific companies,” Bussmann said. "Yet to be determined if any of these bigger brands see opportunity to align through some additional M&A activity, creating bigger companies.”
“It’s hard not to still see a little over a handful of players over the next couple of years but time will tell,” he added.
