bet365 financials highlight the cost of expansion into US, beyond
Like many other betting operators worldwide, bet365 has attempted to increase its revenue potential through the expansion of its betting activities into more US states as regulations there open up, but the platform’s revenues serve as a reminder that more players don’t always equate to immediate profits.
Expanding into more US states is clearly a lucrative opportunity for betting operators, as these new markets have high revenue potential. The reasoning behind this logic is sound, but it does come with a caveat that expansion can be expensive. Untapped markets may have potential customers, but there may also be restrictions and regulations that can increase costs, hindering revenue generation, and that’s on top of the cost of marketing a new product to new customers in a new area.
New US betting markets don’t always deliver immediate profits for operators
Expansion is a normal part of businesses, and as bet365 has shown, the betting industry is no different. That’s particularly true as valuable US market opportunities continue to arise. Online casinos opening up more broadly and to more players, providing digital services in more US states and in other overseas markets, can build up more revenue with even more players brought in the loop.
The issue that sometimes arises is that more revenue doesn’t always mean more profit, at least not immediately, given the costs of operating, expanding, and marketing these services. Many US states are imposing financial restrictions on online betting and gambling even as they welcome the industry within their boundaries, ranging from adding or increasing taxes to more tightly regulating platform offerings.
These points can increase direct costs paid by operators or add the need to abide by changing regulations that can quickly bite into revenues, potentially lowering profit margins. That’s on top of the costs any operator expects to take on in pushing its product to new customers in what is an increasingly competitive online betting marketplace.
Image credit: bet365
A financial report from top betting platform bet365 for the 2024 – 2025 year showcases this scenario as the operator works to ramp up its presence across US states. While bet365 managed to increase its total revenues by an impressive 9%, its total profit was actually 44% lower without taxes yet being deducted.
The bulk of the associated costs was reportedly due to entering these new markets, but other elements were also involved. bet365 opening up its expansion into multiple US states, including Tennessee and Illinois. The latter introduced a per‑wager tax, which Tennessee has already imposed, that directly increased associated operating costs. bet365 also entered the Brazilian market, and the country is also set to pass a new bill that will reduce tax cuts for betting operators.
bet365 isn’t the only operator that is looking to become less reliant on grey markets and and join increasingly regulated Western markets. But while these regulated markets offer security and stability for operators and players alike, they can come with more dramatic costs. These costs initially can cause operators worry, though the profits in areas like the US states opening up to online betting practices are almost certainly worth the effort if a foothold can be established.
Expansion is a necessity to maintain market position, but betting operators like bet365 will always need to consider the costs associated with entering a new market and not be overly optimistic about the margins available within.
Feature image credit: bet365
Khizar Mundia has been playing video games for as long as he can recall. Things have come a long way since the many days he spent playing the original NES, though. He now covers a variety of competitive games and esports, as well as the world of streaming, ranging from Twitch to Kick. If it’s of interest to gamers, it’s of interest to Khizar.
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