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The US iGaming Market is set for astronomical growth
Of course, ever since the first state legalised the activity, operators and affiliates across the world have been looking towards the States as it seems there is an emerging iGaming market at play. Residents who lived in areas that are newly free to engage in gambling will be the preferred target audiences for these operator and affiliates as as they begin to engage in the activity for the first time.
America is already the seat of the world for most things including finance and film as can be seen through New York and Los Angeles. However, the opportunity that the iGaming market presents may mean that America could eventually be known for its gambling market too. Those who have been following the latest news will know that New York has announced that ten licenses have been given to operators to allow them to offer online sports betting to residents of the state of New York. This will undoubtedly help to give the iGaming sector in New York a boost, and it has been suggested that New York could see anywhere between $100 million and $200 million.
One thing that has operators and hesitant about New York in particular is the high tax rate that is placed on online sports betting. This totals 51%, which is a considerable figure. However, many might look to Pennsylvania to argue that this high tax rate should not impede local operators from setting up shop too much. This is because Pennsylvania has already gone forward with high tax rates and high license fees too, and the state is doing just fine in terms of its gambling market.
It can be assumed that the same story that happened in Pennsylvania will also happen in New York. Although the tax rate is rather high, operators will likely suck it up and pay these fees as refusing to do so will mean forfeiting their slice of the iGaming pie. Given the fact that America is one of the last few emerging iGaming markets that has massive potential, there is no doubt that these operators will consider the high tax rates as an expense that must be paid in order to grab as much of the market as possible.
Some who have been paying attention to the financial reports of the operators that are already at play in the US might be aware that some have announced losses since first taking the plunge into the US market. The most spoken about of these would no doubt be DraftKings, who reported broadening losses. Chris Grove believes that these losses can be attributed to the overvaluation of operators by investors who misunderstood what the opportunity in America was. The losses that these operators are now experiencing are being described as a ‘snap-back’ in that these originally inflated valuations are decreasing.
This may raise concerns for some that the US market is nothing more than a bubble, though this itself may ironically be another overestimation. One only must look at established iGaming US markets to see how things can be expected to play out. The already aforementioned state of Pennsylvania and New Jersey show that the markets are stable and even lucrative. In fact, initial projections are highly promising of the US future as an iGaming market as it is believed that the country could be the most productive online gaming market in the world.
There are also other factors at play that are suggestive of the US iGaming market’s growth. The best way of seeing this would be to again return to DraftKings to observe how they are branching out their services by offering new products that are related to the industry. Many people would have heard of NFTs, which have proven to be the latest craze in many industries. Though many are opposed to them, it cannot be denied that they have some relevance in the world today as we begin to move more into a digitalised society. The same happened with Bitcoin, and it might be safe to assume that NFTs are next on the list. Ultimately, the fact that DraftKings is offering NFTs increases the size of the market by a sizeable amount for operators like DraftKings who are willing to experiment.
The iGaming market in the US is still growing, and there is no doubt that it represents an enormous opportunity for operators and investors looking to cash in on the fact that states are legalising gambling. Although there is some reluctance to take the plunge from both parties, the history of established US iGaming markets and initial projections are healthy and point towards the US market eventually becoming one of the biggest in the world.
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