Although the gaming industry in the US presents countless opportunities going into the new year, there is still room for causation, according to Lee Richardson of the Big Betting Balagan.
Sharing his views on the podcast’s final episode of the year, Richardson argued that despite the massive size – and therefore extensive opportunities for growth – in the US market, the sector is beginning to experience overpricing and overhype.
“There was always going to be an element of land-grab, and there’s no question that people have embarked on that,” he explained. “One of the things we’ve seen from this frenzy of buying a piece of the action is the overvaluation and volatility we’ve been seeing.
“We have seen enormous volatility on both sides of the Atlantic in London and In New York of the largest gambling groups, and some of it is being fed by this fear of missing out, particularly in what we know is going to be the biggest legal market in the world.”
Richardson pointed to comments by FanDuel CEO Amy Howe, in which the executive maintained that the US market – despite its vast size – will see some failures alongside its success stories.
This, both Richardson and Howe asserted, is because there is still ‘not enough market’ for the amount of operators that are interested in the US. The BBB co-host further observed that the combined market cap of the five largest European listed companies and top five US companies is less than half that of Netflix.
“All of the Europeans have got interests in the US, but none of the US companies have any European operations worth talking about,” he continued.
“It’s definitely ‘look west, that’s where the future is, but we are seeing evidence of things being overpriced or overhyped.”
“Ini 2022, we might start seeing the start of a shakehout where some people just won’t make the numbers work quickly enough.”
Agreeing with Richardson was his co-host Dan Philips, he added that there are issues with sustainability in the US – such as DraftKings ‘not making any money’.
He was, however, hopeful that there could be greater room for the opening of the igaming market in the US in the new year.
Richardson noted that he was confident that more states would allow igaming in 2022, observing that igaming generated more GGR in the third quarter of 2021 than sports betting, despite only maintaining a presence in four states as opposed to over 28 which allow sports wagering.