How The U.S. Legal Sports Betting Business Is Fundamentally Disadvantaged

NEW YORK, May 26, 2021 (Newswire.com) - People say "Not all bets are not created equal". With local bookies operating through pay-per-head sites, it's a world where credit is king. In all regulated markets expanding all across the U.S., the game is different. 
At a legal book, a bettor will have to post-up the funds, meaning if he's betting $22 on Patriots to win $20, he must put down $22  — be its cash or by online account funding and have the funds withheld, pending game outcome.  One of the leaders is PayPerHead.net

The vast majority of NJ's ever-growing monthly betting handle, most recently $488M in Oct '2020, bettors placed wagers online through PayPal, bank deposit, While 85% of wagers came online, the other 15% of transactions required posting up of the funds at physical books — cash across the counter or inserted into sports betting kiosks.

A bet's a bet, the fundamental financial transactions the competing illegal vs legal markets create different costs, opportunities, and challenges.
Outlining the key differences in sports betting ecosystems built upon credit from illegal bookmakers vs posting up with legal books — 2 markets that will compete as state-sanctioned sports wagers rapidly expand across the U.S. 

New legal sportsbooks competing for market share are cutting up a very healthy amount these days to make their books stand out above the noise. People in NJ or Penn know what I mean. Marketing costs go far beyond the waves. Mail. Ads. TV. Signage. Sign-up bonuses / free bets? Bettors ultimately pay the books for the fun long-term, but there's large acquisition spends involved.

Credit bookies don't advertise and don't have to give attractive bonuses. They have ground agents that pay standard commission fees when a new client comes aboard. Can't extend credit to strangers. They meet. Ultimately the agent is responsible for the book for the money.  (Note: Difference between offshore post-up shops operating illegally in the U.S., and credit-based bookies, many of which operate in pay-per-head (PPH) models, where the agent pays a fee to have clients maintain accounts through a site hosted by the larger operation. 

While legal books will be restrained by the inability to extend credit, their potential for clientele growth is big. Tap into population that probably would never transact with an illegal book. Many legal books are crawling over each other to reach the Barstool audience In general, legal books are reaching new audiences, a massive field of oil laying under the weight of legality, waiting to get tapped. 
And when some media conglomerates wake up, penetration into U.S. audience by illegal bookmakers will wane, in favor of state tax-paying sportsbooks. Consider this example: Stadium Sports Network is owned by Sinclair Broadcast Group, which is the largest owner of stations affiliated with FOX and ABC. As you may be aware, FOX now offers a full sportsbook called FOX Bet.

Source: PayPerHead.net