Recently, the British gambling brand Betfair announced its decision to withdraw its operations from the New Jersey market. The sports betting exchange operator revealed that it will exit the state’s gambling sector because of the unsatisfactory results in the market combined with the fact that New Jersey would receive its first sports betting exchange.
The British gambling company revealed that its sports betting exchange service will no longer be available in the state as of October 1st, 2020. Kip Levin, the Chief Financial Officer of FanDuel Group, further explained that Betfair had not managed to accomplish what he described as a “critical mass” to make the betting exchange efficient and profitable. Reportedly, the withdrawal of Betfair from the New Jersey gambling market is part of a broader move that the parent company of the brand, Flutter Entertainment, has undertaken in an attempt to restructure its business on a global scale.
Betfair entered the New Jersey market in 2015 after receiving a formal approval by the local Division of Gaming Enforcement (DGE). Then, in 2016, the company released its proprietor 4NJBets but over 2018, the service’s sports betting handle amounted to only $12.4 million.
Unfortunately for Betfair, what turned out to be a successful strategy in its domestic market had not worked out in the US, as the service had failed to become appealing to local customers, as explained by Mr Levin. Furthermore, he revealed that a customer base that was familiar with “exotic wagers” and the unwillingness of some major US racing associations to use another business model have been contributing factors to the unsatisfactory results of the company in New Jersey.
Flutter Entertainment’s Brands Have Been Withdrawing from a Number of Global Gambling Markets
As mentioned above, the recent announcement for the company’s exodus from the state of New Jersey follows a previous decision of its parent company, Flutter Entertainment, to withdraw its PokerStars brand from three markets, including Macau, China and Taiwan. At the time when it made the announcement, the company did not cite any specific reasons for the withdrawal decision.
On the other hand, a few months ago, in May 2020, Betfair revealed that it was to exit the Russian market, as it offered its services to local customers without holding an operating licence for that. A month later, in June 2020, the company withdrew its operations from the horseracing market of Japan.
Last year, Betfair pulled out its services from India following a scandal involving a local lobby group that has been backing the expansion of Betfair in the country. However, the brand faced significant competition in the local market, so its owner Flutter Entertainment decided to prevent poor future performance and withdrew Betfair’s operations from the country.
As far as the state of New Jersey is concerned, the competition there is rising, with the sports betting startup Sporttrade having unveiled plans to introduce a proprietor betting exchange service to the local market. After receiving the required regulatory approval, another sports betting exchange will be available to New Jersey customers, but according to analysts, it would need to try a different strategy in case it wants to be more successful than the one provided by Betfair.