- MaximBet has closed their sports betting operations and is no longer accepting deposits or taking bets.
- Carousel Gaming announced a partnership with Maxim Media–publisher of Maxim Magazine–in early April 2021.
- MaximBet was operational in Colorado and Indiana at the time of their withdrawal from the US market.
The extent to which the various ‘stakeholders’ in the United States sports betting industry have screwed it all up is astounding, though not surprising. Immediately after the end of PASPA, I was asked by a number of media outlets what I expected in the short and long term future for US sports betting. I deferred on the long term, but in the near term I said that while a few states would get it right the majority would screw it up from the start with high taxes, limited competition and burdensome regulation.
I’m not happy about it, but I couldn’t have been more correct if I’d been able to travel into the future and see it myself. We’re now starting to see the ‘collateral damage’. Churchill Downs, Incorporated got out of the sports betting business awhile ago with their TwinSpires brand. In the past month, Kindred owned Unibet has withdrawn from Iowa–one of the few states that somewhat ‘gets it’ when it comes to sports betting–with minimal explanation. Fubo Sportsbook ceased operations immediately right before their Q3 2022 earnings call (late October) not long after announcing a ‘strategic review’ of their gaming product.
The latest company to withdraw from the US sports betting market is MaximBet, which until their announcement today looked to be gaining some decent momentum. There hasn’t been much in the way of explanation other than the ‘challenging macroeconomic conditions and an increasingly cost prohibitive marketplace’ cited in a message to clients:
The ‘macroeconomic’ conditions are no doubt inflation and the accompanying increase in interest rates. That’s been the biggest mainstream news story of the past few months, so I’ll spare you my analysis. The ‘increasingly cost prohibitive marketplace’ is also a legitimate issue, though it’s significantly more complex and nuanced than just insane marketing and customer acquisition costs. We’ll take a deep dive into that in a subsequent article.
It is somewhat mind boggling that given the growing mainstream interest in and acceptance of sports betting, the stakeholders are finding new ways to screw things up. Most of the blame goes to the bureaucrats and politicians in the majority of US states that purportedly have legal sports betting. Some of the blame goes to the gaming companies that gave little to no pushback to boneheaded regulation and absurd tax rates.
New York should be a massive sports betting market with everyone making a ton of money. Instead, it’s a microcosm of everything that is wrong with US sports betting. You don’t need to be a gaming expert or a CPA to understand that the financial setup in New York just won’t work. With 15 or 20% going to the legacy gaming interests under the insipid ‘tethering’ requirement, and more than 50% of gaming revenues going to the state there’s not much left. Even so, sportsbooks tripped over each other trying to get into the market. With 60% to 70% coming off the top immediately, there’s no way possible that volume can make up for it.
The image above what you’ll see if you visit the MaximBet main page. There’s a lot more to unpack here on a micro and macro level and we’ll start assessing the carnage in subsequent articles. Stay tuned.