BlueBet might be one of the smallest players in the Australian betting market, but the upstart bookie is busy preparing an ambitious attempt to make it big in America.
BlueBet’s executive chair Michael Sullivan, who launched the bookmaker in 2015, said that he was only a handshake away from getting BlueBet’s American betting license. He also added that the company will soon go public and land on the ASX boards on July 2. BlueBet’s market value is around $220 million.
Operating on the Lower End of the Australian Market
Mr Sullivan and CEO Bill Richmond are convinced that the bookmaker will go to the next level, and are doing everything in their power to make that happen as soon as possible.
The betting operator currently has a minuscule 1.5 per cent share of the Australian betting market, which is dominated by the likes of Ladbrokes, Sportsbet, and TAB.
However, BlueBet’s man in charge thinks that the Australian wagering scene is a decent environment even for bookmakers with minimal market shares, as punters want to have betting accounts with multiple sportsbooks.
He said that the consolidation of the Australian betting scene, where larger bookmakers absorb smaller ones (e.g. Sportsbet and BetEasy) didn’t scare him and that he was happy to work at the lower end of the market as that provided ample success opportunities too.
He even added that the incompetence of larger bookmakers, particularly TAB, helped smaller betting operators grow their businesses and that the future was bright for BlueBet.
The wagering provider expects to finish the 2021 financial year with $36 million in revenue and $21 million in profit. The company expects to increase its market share in the Australian betting scene from 1.5 to 5 per cent by 2025.
The American Gold Rush
However, even though there are enough growth opportunities for BlueBet in Australia, the betting operator is focusing most of its attention on the booming US wagering scene.
Mr Sullivan said that referring to America as a gold rush would be an understatement. However, he is also aware of the challenges that come with trying to conquer a market with non-existent betting history.
The wagering industry veteran with 13 years of experience running William Hill and Sportingbet in Australia said that the betting scene in the US is 20 years behind Australia. He said he was sure that they would catch up but that it would be hard.
Betting on sports in the US only became legal recently, after the Supreme Court lifted the wagering ban in 2018. And even though there are a lot of states that are yet to legalize betting, it is estimated that the market could be worth as much as $17 billion (US$13.5 billion) by 2025.
Investors are aware of this, and they are jumping on opportunities to invest in betting operators joining the American betting scene. And that’s why BlueBet will soon go public.
If recent IPOs of bookies are anything to go by, BlueBet’s initial public offering will be an unprecedented success. For instance, Australian-based bookmaker PointsBet saw its share price increase by 560 per cent since it first went public. Similarly, BetMakers, a company fronted by influential betting figure Matthew Tripp, witnessed a sevenfold increase of its shares since its IPO 18 months ago.
Betting License Already Secured
To start working in the US, though, BlueBet needs to have a wagering license. However, according to the bookie’s CEO, that was “virtually done” and was a handshake over the phone away from being completed.
BlueBet’s initial plan for its US expansion is to start as an independent bookie there. As soon as US casino operators see that BlueBet’s technology is up to the task, though, Mr Sullivan said he would go to mid-tier US casinos to propose a joint venture.
It is essential that new US betting providers partner with local casinos, as that allows them to get a greater market reach and more customers to target.
In essence, when that happens, BlueBet, even with its modest capital backing, will have similar market opportunities as the biggest players in the US betting scene.