Tipico Sale Would Likely Have Minimal Impact In Colorado

Written By Adam Hensley on 06/21/2024 - Last Updated on June 25, 2024
A 'For Sale' sign

With a potential sale of Tipico looming, there is one rumored buyer: MGM.

According to an Earnings + More report, MGM is targeting the German sports betting company, which has a presence in four US states, including Colorado. The rumors are a few months old, but there has been a recent trend of smaller operators leaving markets or selling operations entirely. In other words, until someone confirms the sale won’t happen, there are likely ongoing negotiations.

Tipico doesn’t boast the same brand recognition in North America as in Europe, and it’s struggled to compete in the US.

If MGM does acquire Tipico, how would that impact Colorado sports betting?

Tipico has strong European presence

In addition to Colorado, Tipico operates sportsbooks in Iowa, New Jersey, and Ohio, as well as an online casino in the Garden State.

Tipico does not have a retail sports betting operation in Colorado.

Colorado was the second state Tipico went live in. When it launched in the Centennial State, the company said it would open a tech hub in Denver. That didn’t happen.

Tipico was reportedly for sale in 2022

MGM’s possible purchase of Tipico would be a major step in bolstering its European gaming presence. Tipico enjoys a very successful operation in Europe. For instance, it commands 50% of the sports betting market in its home country of Germany.

It’s worth noting that MGM just released BetMGM in the Netherlands shortly after launching in the United Kingdom.

By acquiring Tipico, MGM would presumably also take over its sports betting operation in the US. However, it is not a huge revenue driver in the few states it operates in.

There were rumblings in 2022 about a Tipico sale. It never ended up happening. At the time, Fanatics was believed to be a potential buyer. There’s been no word on whether the company is still interested.

How Tipico performs in other states

Tipico has not made the dent it would have liked in the US so far. At least compared to what it has done in Europe.

In Iowa, the sportsbook is a non-factor. Tipico generated roughly $5.8 million in handle in 2023, resulting in just $220,991 in revenue for the year. Its handle accounted for just 0.27% of Iowa’s total wagers in 2023. Its revenue represented only 0.12% of Iowa sports betting last year.

It’s a similar story in New Jersey. From January to April, Tipico’s revenue was about $1.3 million. New Jersey’s sports betting revenue for its entire market over that same span amounted to $434.2 million. So, for the first four months of 2024, Tipico accounted for just 0.29% market share.

In Ohio, Tipico found some success. Its handle came out to a little more than $80 million last year. It collected $10.1 million in revenue. Its handle made up 1.12% of the market, while its revenue accounted for 1.08% of the state’s total.

What impact would a Tipico sale have in Colorado?

A Tipico sale would likely have little impact in Colorado.

Unfortunately, the specifics on how well or poorly Tipico performs in Colorado are unknown. The Colorado Department of Revenue, which releases monthly sports betting reports, does not share revenue and handle numbers for individual sportsbook operators. It releases monthly reports that share the state’s Colorado sports betting revenue and break down betting by individual sport.

However, other states provide some insight into Tipico’s Colorado presence.

Ohio launched its market last year, and Tipico found some success early. But in markets such as Iowa and New Jersey, which have been running for a few years, Tipico’s share is much lower.

The range we’re working with is anywhere from 0.12% to 1.12% of the market share in Colorado. In 2023, Colorado’s online sports betting market totaled $390 million in gross gaming revenue. Tipico’s gross gaming revenue in Colorado last year was probably between $468,281 and $4.4 million.

The higher end of that scale is assuming Tipico has a similar market share in Colorado as Ohio. That’s probably not the case. Its market share in Colorado is probably closer to its market share in Iowa and New Jersey.

That would put the high end of Tipico’s Colorado market share around $1.1 million.

Just a tiny chunk of the market.

Photo by Shutterstock
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Adam Hensley

Adam Hensley is a journalist from Des Moines, Iowa, who currently works for the USA Today Network. His byline has appeared in the Associated Press, Sports Illustrated and sites within the USA Today Network. Hensley graduated from the University of Iowa in 2019 and spent his college career working for the Daily Iowan’s sports department, both as an editor and reporter.

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