Casinos in Colorado should have no problem finding experienced sports betting companies to partner with. Betfred sportsbook is one of them.
The United Kingdom-based company wants to expand into the United States. It identified Colorado among the initial markets for its entry.
Why Betfred sportsbook picked Colorado for expansion
There’s no doubt that Colorado is desirable for sportsbook operators. The market has several attractive qualities.
The Centennial State offers a decent population and a robust menu of local sports. In addition to a franchise in each of the “big four” North American professional sports leagues, the state also houses two college athletic programs.
That should create a lot of interest in legal sports betting in Colorado. The state has complemented that with a good regulatory structure.
While Colorado’s tax rate for sportsbooks isn’t the lowest in the nation, it’s not the highest either at 10% of handle. Colorado also avoided most of the mistakes that other states have made, like requiring online sportsbook users to register in person.
Several vendors have already beat Betfred to market access deals. That includes DraftKings, FanDuel and theScore Bet. Betfred doesn’t have to panic, however. There is time to secure access.
Why there is no need for a high level of urgency
Betfred can afford to take a little time to be picky about its Colorado casino partner. Even if the sportsbook announces a partnership today, it couldn’t start operating in the state for some time.
That’s because the law doesn’t allow legal sportsbooks to start accepting wagers until May 1 at the earliest. There is plenty of work to do to be ready for that day, so Betfred really can’t drag its feet either.
Once Betfred makes a deal with a casino for market access, it will likely get right to work. Initially, that will focus on building out that casino’s brick-and-mortar sportsbook.
That’s more likely to be ready to go on May 1 because it’s easier to get retail operations up to speed. While it may not be long after retail books launch that online components follow suit, Coloradoans should expect to have to physically visit casinos on the first day of legal wagering.
Ease and speed of getting into the state are the reasons why Betfred is likely to partner with a casino instead of going it alone. That is an option for Betfred, however.
Why the “Plan B” of being a standalone operator is less desirable
Colorado’s sportsbook rules allow standalone online-only operators to receive licenses. Betfred’s online product makes that an option.
Partnering with a casino in the state has several advantages. Those include carrying costs, market knowledge and promotional capital.
By simply acting as the operating vendor for a casino’s sportsbook, Betfred lets the casino pay all the fees associated with licensure in the state. The cost to acquire and maintain a vendor license is much less.
On top of that, the casinos have familiarity with the market that Betfred doesn’t. That comes most in handy when marketing the sportsbook.
Colorado casinos bring a built-in customer base and have already established key relationships in the state. They also have a natural incentive to market the sportsbook because they share handle with the operator.
For these reasons, expect Betfred to announce a market access deal soon. It’s uncertain whether it will be ready on May 1, but what’s sure is that the company is interested in Colorado.