BlueBet shares plunge 21% as US expansion strategy stalls
Australian bookmaker withdraws Virginia license application as regulators cite inexperience compared to other candidates
Shares in sports betting operator BlueBet tumbled 21.7% today after the bookmaker withdrew its Virginia sports betting license application.
By the end of Monday’s trading on the Australian Stock Exchange (ASX), BlueBet stock had fallen to A$1.94, down from a previous closing price of A$2.47.
In a statement announcing its withdrawal, BlueBet said it had chosen to pull out on advice from the Virginia Lottery, which is currently overseeing the licensing process.
“The decision follows an exhaustive license application process comprising 18 applications for only five available permits,” BlueBet explained.
The 18 applications for up to five licenses were submitted in the second half of May, four months after the Old Dominion went live with online sports betting.
Under standards set out by the Virginia Lottery, operators applying for a sports betting permit do not pay for an application submission but are liable to a $250,000 fee prior to any permit being awarded.
“During the process, the BlueBet board received advice from the regulator that licenses would, at this stage, be granted to operators which had experience in other states and have equity interest owned by minority individuals or minority-owned businesses,” the firm added.
Approved permit holders in the state include FanDuel, DraftKings, BetMGM, Golden Nugget Online Gaming, Bally’s, Penn National Gaming’s Barstool Sportsbook, and Kindred Group’s Unibet brand.
There are currently eight sportsbooks on offer, although the regulations mean there could potentially be a total 18 digital options.
BlueBet’s US strategy centers around five target states in Colorado, Tennessee, Maryland and Iowa, where the firm received a license in July, as well as what would have been Virginia.
In documentation related to its recent $80m IPO, the firm revealed it would look to commence sports betting operations in the US in Q3 2022.
BlueBet has also said it is reviewing regulatory progress in a further 10 soon-to-be regulated US states.
The setback follows BlueBet’s rejection for a highly coveted sports betting license in Arizona.
BlueBet and its partner, the Colorado River Indian Tribe, were among several operators to miss out on licenses, with fellow Australian bookmaker PointsBet also being denied a license.
Eight sports betting licenses were awarded to the state’s sports teams and sporting organizations, granting access to operators including BetMGM, William Hill, DraftKings, FanDuel, Penn National Gaming, Bally’s and Rush Street Interactive via partnership contracts.
BlueBet has since said that while the Arizona license would have been an “unexpected” addition to its US growth strategy, the license was never part of the firm’s blueprint and therefore its wider strategy would remain unaffected by the rejection.
That was not the case in Virginia, however.