Betfred Continues to Shrink US Sports Betting Footprint
Betfred is continuing its phased withdrawal from the US mobile sports betting market, with its Virginia operations scheduled to cease on October 21, 2024. The UK-based sportsbook has already stopped accepting new online deposits, bets, and registrations in Virginia as of October 1, according to the company's statement.
The Betfred logo outside a retail sportsbook in the UK. (Source: Betfred)
LISTEN TO THIS ARTICLE:Customers with existing wagers in the state will see those bets settled via early cash-out by the exit date, with any remaining balances or winnings made available for withdrawal. This move marks Betfred's exit from its fifth major US state in the 2024 calendar year.
Related: Betfred Pumps the Brakes on US Sports Betting OperationsVirginia's departure follows a similar exit strategy Betfred has been implementing across multiple states. The company has already closed its mobile sports betting operations in Colorado, Ohio, and Maryland earlier this year and is planning to leave Arizona on November 4, 2024.
Despite pulling out of these states, Betfred continues to maintain its online betting presence in Iowa and Pennsylvania, alongside its brick-and-mortar sportsbook locations in Nevada, Louisiana, and Washington State. However, its retreat from larger state markets signals ongoing challenges for the company in the competitive US mobile betting arena.
Betfred's withdrawal from Virginia is part of a broader contraction in the state's mobile sports betting landscape. It follows the departures of several other operators this year, including Unibet, Sports Illustrated Sportsbook, Betway, and SuperBook.
The contraction reflects broader trends in the US sports betting industry. Smaller operators are struggling to compete against well-established brands that can sustain aggressive promotional spending, pushing out other sportsbook operators.
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Financial Traction Out of Reach
Betfred's decision to leave Virginia appears to be linked to its inability to capture significant market share in the state. Over the first seven months of this year, Betfred handled approximately $3.8 million in sports bets, which represented only a marginal portion—about 0.1%—of the total $3.29 billion wagered online in the state.
This performance was down nearly 46% compared to the same period in 2023. Regulatory changes in Virginia that no longer allow sportsbooks to deduct promotional spending from their gross revenue seem to have compounded Betfred's financial difficulties.
Last year, Betfred was able to claim promotional deductions totaling $660,300, accounting for 5.2% of its overall $12.7 million in handle. Yet even with these deductions, the company struggled to post positive revenue numbers, ending with negative adjusted gross revenue (AGR) in nine out of the 12 months that year.
At one point, Betfred's AGR fell to -$372,824 in December, reflecting a broader challenge in offsetting the costs of acquiring and retaining customers in a fiercely competitive market. The changes to Virginia's promotional deduction rules in 2024 meant Betfred could no longer benefit from this financial relief, leading to an even steeper financial decline in the state.
By mid-2024, Betfred had achieved a 7.3% hold rate, generating approximately $275,400 in gross winnings. However, even with this hold, the company's total adjusted gross revenue remained negative, standing at minus-$106,796 by August 2024. Over the course of its time in Virginia, Betfred had only paid state taxes on its sports wagering revenue once, with a minimal $154 remittance in January 2023.
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