While NC State readies for Final Four weekend, North Carolina bettors ready themselves for the first opportunity to wager on the marquee sports betting event.
Sports betting in North Carolina has been up and running for nearly a month and the early returns have been very promising. There are also more eyes than usual on the state, as it was the last planned state launch for the foreseeable future.
Compliable’s Chief Revenue Officer Greg Ponesse and OpenBet’s Senior Director of Customer Experience Susan Quach discuss how the launch has gone and delve deeper into the state’s sports betting model and future states might learn from it.
Legislation means operators must partner with an existing sports team, venue or tribe to offer in-person or online betting. Will this restrict the number of market entrants or slow online growth?
GP: It will definitely restrict more market entrants as there are only so many local tribes, sports teams or venues you can partner with. With fewer sportsbooks and iGaming providers entering the market, online growth will definitely be slow early days. When the market opened on March 11, eight sports betting apps were available to bettors, however, providing plenty of choice from the get-go. This legislative approach is not unique, and we have seen it in other states, such as Arizona, which earlier this month reported that sports betting handle rose to $706.4 million in January 2024, up 1.6% from December and 16% year over year so the market can still flourish, even with a limited number of operators.
SQ: It is a common trend in the U.S. for operators to partner with a sports team or venue and several states have mandated this. This law has its pros and cons, but it is ultimately the legislators’ decision as they must balance a competitive market and avoid oversaturation. Generally, a market entry strategy that ties operators to teams or land-based venues gives local operators a fair chance to establish themselves with the aim of having a balanced market where multiple operators can compete.
Having just been live for around a week before the start of March Madness, one the biggest betting events of the year, how did operators cope with an incredibly large amount of traffic in its immediate first days?
GP: According to GeoComply, the company recorded nearly 5.4 million location checks in the first two days of legal online betting in North Carolina. They also disclosed that there were nearly 370,000 active accounts by noon on March 13 with sports betting activity spiking 56% during the first two rounds of March Madness compared to the week before, so it’s safe to say that the market took off with a bang.
With any new state opening, operators have had time to prepare and will do their absolute best to be ready on the starting line. Most operators also now have experience from taking their product live in multiple states and have processes in place. There is a significant amount of testing and preparation that is done to ensure that opening day is a successful as possible ie. onboarding the greatest number of users ahead of time to generate the most amount of revenue as soon as the market is live.
Will the news of North Carolina legalizing online sports betting push neighboring states, namely South Carolina, to follow suit?
SQ: Launching around major sporting events enables operators to manage the traffic and grow their customer base. OpenBet works with operators such as FanDuel to build a support framework that is robust, flexible and scalable enough to cope with the high load. Our IT team offers increased levels of support during these key events, with daily report updates and constant monitoring to make sure the environment is stable enough to withstand an uptick in traffic.
GP: I would assume so as there are more followers versus leaders. It is somewhat beneficial to watch a neighboring state’s experience from afar and determine whether their state would be able to replicate a similar model and perhaps learn from any of the opportunities and challenges that arise. Sports betting could now be considered mature in many markets and legislators and regulators can learn from the more established states and implement best practices in their own laws.
SQ: We are at a point in the U.S. where 38 states have legalized sports betting. For any states that have not legalized, it is largely due to complex legislation and there is no simple solution. However, North Carolina is an example of how a complex market can open successfully, with more than $195 million wagered in its opening week. It remains to be seen what unfolds in neighboring South Carolina, but whatever happens, OpenBet is always well-prepared to enter new legalized states as soon as they launch.
