The end of the American dream? How the US betting market flutters are set to be felt in Australia

Since the landmark US Supreme Court ruling overturned the Professional and Amateur Sports Protection Act (PASA) legislation in 2018, the United States sports betting market has been the golden child of global wagering companies.

The widespread legalisation saw the major global players flood in, with Flutter acquiring a majority stake in Fanduel in 2018, while GVC Holdings (now Entain), secured 50 per cent of Bet MGM around the same time.

Flutter already had a substantial presence in Australia via Sportsbet, which would become a market leader, while Entain’s presence in Australia under global value chains (GVC) increased through its acquisition of Ladbrokes, and then the purchase of Neds later in 2018.

The more “mature” Australian market was seen as an ideal product development centre for the newly unveiled American consumer, with assets built and lessons learned in Australia (as well as Great Britain) having a ready-made application in the United States.

The larger “uninitiated” audience was seen as the priority, while the Australian market continued to grow, with the pandemic helping to reverse Tabcorp’s previous dominant position, enriching both Sportsbet and Entain.

But while the US market went through a period of supercharged growth – handle on legal sports betting grew from US$1 billion in 2018 to US$170 billion in 2025 – the Australian bubble burst with turnover on the decline and profitability slumping for bookies in the past three years.

In a reflection of those contrasting market conditions, Sportsbet’s contribution to Flutter’s global revenue dropped from 21 per cent in 2019 to 9 per cent in 2025, while Entain’s Australian arm went from driving 14 per cent of global revenue to less than 8 per cent.

Now a fully mature market, Australia has become expensive to conduct a bookmaking business in, with increased regulation, taxation and fees.

That dynamic of a booming American market and a stagnant Australian one led to the inevitable discussions of further consolidation and the possibility that global powerhouses might look to offload their Australian businesses.

That hasn’t happened due to several factors, including a lack of suitors for the multi-billion-dollar businesses as well as some well-publicised compliance challenges for the second and third biggest bookies, Tabcorp and Entain.

There was also the fact that Sportsbet got to a size where it can’t “inorganically” grow without attracting the attention of competition laws.

With growth inhibited, all three big bookies have looked to cut costs to boost margins.

But while the Australian bubble has slowly reduced in size, the burgeoning American market appears to have turned in an instant.

The rise of prediction markets has upended the perceived dominance of the big American players DraftKings and Fanduel, and Flutter’s share price has more than halved since the start of the year, wiping $US18 billion off its market cap.

Entain is less exposed to the United States, with BetMGM, which it holds 50 per cent ownership of, having around 13 per cent of the US market share compared to Flutter-owned FanDuel’s 43 per cent.

Nevertheless, its share price is still down 27 per cent so far this year, as it bids to ride out the wave of American disruption, driven by prediction-market players such as Kalshi, Polymarket, and many others.

But that disruption is not just confined to the market itself. At a corporate level, there are those seeking to take advantage of the sudden drop in wagering companies’ values.

This week People Incorporated, led by Barry Diller, lodged a takeover bid for MGM, which would likely include Entain’s 50 per cent stake in BetMGM. It could be that Entain exits the American market, while there are also rumours that MGM, under Diller, might look to buy Entain’s global assets, although that seems less likely.

That comes just days after Fertitta Entertainment secured gambling behemoth Caesars Entertainment for $17.6 billion in a move that may well ignite a round of acquisitions in the American gambling sector.

Renowned American gambling figure Captain Jack Andrews pointed out the significance of that development on X last week: “Tilman Fertitta buying Caesars could have some far-reaching consequences for sports betting. Golden Nugget has 8 sportsbooks in 6 states. CZR operates nearly 60 sportsbooks across 20 states. But he also owns 12.3% of Wynn and nearly 3% of DraftKings. We could see some massive consolidation,” the professional gambler said.

At Flutter, billionaire Kenneth Dart has built a 27.6 per cent stake in the company, fuelling speculation about a broader takeover bid. He also owns a chunk of wagering tech company Evolution.

Venture capitalist Tom Waterhouse told AusBiz TV this week that he could see why Dart would get heavily involved in both companies, given their scope and global reach.

“I can definitely see as an outsider why he is making a bet on that market and he has picked two companies that are the big ones that are trading at relative value,” Waterhouse said.

“If you believe that Flutter can withstand the onslaught attack from these prediction markets and it regain supremacy in the US market, and you believe regulation and taxation has reached peak, then it’s a very interesting bet.”

It seems destined that there will be an ownership change at the major global players over the next 12 months, especially after the drop in share prices seen so far this year.

What does that mean for an Australian market, which, while it has its challenges, has shown green shoots in the past six to nine months?

Ownership change often predates strategy change, and a focus on American investors may sacrifice global growth for a US-led rear guard against prediction markets, which have already said they are looking outside the US for growth, including in highly regulated Japan.

The American corporate tremors may indeed be felt here as all options are put on the table.

Does this mean the Australian businesses may be carved off? Sportsbet seems unlikely given its size, and while Entain’s Australia future has been a point of discussion for the past 18 months, no clear suitor has emerged.

But some may use this as an opportunity to do a bit of their own acquisition. Watch this space.