SI Exit In Virginia Is Latest Example of Market Contraction

SI Exit In Virginia Is Latest Example of Market Contraction
Fact Checked by Jim Tomlin

The state of Virginia is on the verge of losing another online sportsbook. SI Sportsbook, which is tied to the Sports Illustrated brand, will shut down its Virginia sports betting operation on June 3, according to a post on its site.

It's not an unexpected decision. Two months ago, Gibraltar-based 888 Holdings announced it would sell its U.S. online holdings to Hard Rock Digital. Besides Virginia, 888 – which recently changed its name to Evoke – operated SI Sportsbook in Colorado and Michigan. It also ran an iGaming app in Michigan.

The announcement alerts SI Sportsbook users that it is "partnering" with Hard Rock Bet, which already has a license in Virginia. Deposits have been disabled on the SI site, and betting will officially cease on June 3. The announcement also encourages people to register for a new Virginia sportsbook apps account with Hard Rock.

SI's exit follows WynnBET, which left Virginia last summer as part of a decision by the Las Vegas company to downsize its digital operations. After June 3, Virginia sports betting will have 14 licensed online operators.

No European Invasion In Sports Betting

The Virginia Lottery, which oversees sports betting in the state, does not break down performance by operator. However, SI Sportsbook is likely among the smaller operations in the state.

Now in its sixth year, the U.S. sports betting market is witnessing a contraction among operators nationally. Many of those leaving or seriously considering cutting ties are European operators that sought to expand into the States. Besides Evoke, Kindred Group announced late last year it would pull its Unibet brand out of the U.S. and Canada. Meanwhile, Super Group, which operates Betway, is reviewing its operations on this side of the Atlantic. And reports indicate that German-based Tipico is shopping its U.S. operations.

These European operators have had success elsewhere but have found tough sledding in the U.S. market. In America, DraftKings (which has DraftKings Virginia Sportsbook among many others) and FanDuel control upwards of 70% or more of the market in most states. That has meant foreign companies have had to fight for a small part of the sports betting and iGaming pie as they compete with other established domestic brands, such as BetMGM and Caesars Sportsbook.

Media Brands Not Faring Well

If the U.S. legalized online sports betting had happened a decade or two earlier , then maybe SI Sportsbook would have had a shot at being a significant player in the market. But by the time wagering on sports – including operators in the commonwealth offering Virginia sports betting promos – became legal outside of Nevada in 2018, Sports Illustrated was already a fading brand in sports media.

Once a titan as a must-read weekly magazine, SI has faced challenges similar to newspapers in competing for readers with online sources. Authentic Brands Group bought the brand in 2018 and unveiled plans to license the SI name for non-media ventures. Three years ago, Authentic gave 888 the license for online gaming.

It seems natural to tie a sportsbook with a well-known media brand, but other efforts to do that in the States have also not fared well. FOX Bet ended up dying after Flutter Entertainment bought FanDuel and made the latter – including FanDuel Virginia Sportsbook – its primary U.S. brand.

PENN Entertainment signed a massive deal with Barstool Sports for its naming rights, only to back out last year after just a couple of years, then sign a $1.5 billion deal with ESPN to create ESPN BET. Even with ESPN's name now behind it, ESPN BET is still vying against BetMGM, Caesars and Bet365 for third place among U.S. operators.

USA Today photo by Gary Cosby Jr.

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Author

Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.

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