OPINION: MaximBet Opens Ugly Truth For Legal Sports Betting

• MaximBet shutdown just a few days after FuboTV announced their ceasing of operations.
• Cannibalization of sportsbooks may continue as sportsbooks struggle and customers lodge complaints.

INDIANAPOLIS – Last week, MaximBet released a statement ceasing operations as a legal US sportsbook. Players will have to rely on other options as MaximBet explained “macroeconomic conditions and an increasingly cost prohibitive marketplace” as the reason.

The US sports betting market is a sportsbook-eat-sportsbook world but they also eat up players.

Recently, it was noted that the Better Business Bureau received over 2000 complaints toward BetMGM, FanDuel and DraftKings.

While FanDuel (A-) and DraftKings (B-) show service, BetMGM’s grade is an F.

This rating stems from customer complaints and the company’s ability to respond to them. The F grade puts them in a cohort with 1.5% of the worst rated businesses by the company.

Bonuses To Blame

With first-time sportsbook deposit bonuses and free bets, there is often playthrough or some condition that must first be met. Those accepting a bonus for the first time are often casual bettors – one that the sportsbook desires.

They are often unfamiliar with sports and/or gambling in general and can be sourced from the many sportsbook advertisements.

In fact, DraftKings CEO Jason Robins has been quoted saying “This is an entertainment activity. People who are doing this for profit are not the players we want.”

But gaining a wide player based is required in the US sports betting industry. With such rapid acceptance, costly advertisements from sportsbooks have followed suit.

So much so that The New York Times is investigating the rapid acceptance of legal sports betting in the US despite it being once a taboo nature. Something that caused the American Gaming Association to fire off a thread of tweets on Sunday.

The excessive promotional spending hurts both sports bettor and sportsbook. Promotions touting massive parlays or longshot bets making someone $500,000 are good advertisement but bring forth unrealistic expectations.

Maybe that’s why FanDuel’s A- grade is reflective of the fact that their acquisition costs are 60% lower than competitors due to referalls.

Finding Inconsistencies

But it all comes down to consistency. Sportsbooks have been found to limit winning customers, while permitting losing customers to gamble away their bankroll.

While maximum and minimum bets are required to be posted, the sportsbooks have the right and ability to modify these amounts based on the bettor. Known as “sacking”, the mindset is to remove professional bettors by limiting them.

However, the definition of a professional sports bettor is rather vague and unclear.

Are they one who gambles a lot and wins? Someone who makes money? What about someone who gambles a lot and loses? What is “a lot”? Is it based on the number of bets placed? The amount of money bet each time?

The questions are just some of the many variables that affect how sportsbooks accept action.

The Entertainment Perspective

But, sportsbooks have been given an unchecked power. Often in their terms and conditions, it states the sportsbook is used for entertainment or for casual fans. Some sportsbooks explicitly talk about professional betting.

FanDuel: Your participation in the games and sports wagering is personal and not professional

The Colorado Division of Gaming director, Dan Hartman, even went as far as saying “there is no right to be a professional sports gambler.”

Add in the custom betting limits on top and it seems the whole industry is unsteady. Sportsbooks need to make money to stay in business, but they can’t be the only ones to do so.

With FuboTV shutting down their gaming sector and MaximBet joining as well, it might take some heavy cannibalization over the next few years before the legal US sports betting market settles into maturity.

News tags: American Gaming Association | BetMGM | Better Business Bureau | Colorado | Dan Hartman | DraftKings | FanDuel | FuboTV | Jason Robins | MaximBet | New York Times