Massachusetts Law Allows For 15 Sportsbooks. Will That Ever Happen?

Massachusetts currently has six online sports betting operators. Soon, it will add three more in Betr, Bally Bet and Fanatics Sportsbook. Another will join the fray, Betway, next January. That’s 10 total sportsbooks.

But state law actually allows for up to 15 online sports betting licenses.

New markets like to boast about how open they’ll be, and they often are. Colorado has 23 active sportsbook licenses after losing a few to low margins and robust competitors. It’s easy to at least imagine 15 Massachusetts sportsbook licenses.

It takes a more imaginative mind to picture Maryland assigning all 60 mobile licenses to qualified applicants. At the time of this writing, Maryland’s Sports Wagering Application Review Commission has only awarded 14 of its 60 possible mobile licenses.

However, in reality, it isn’t a sure thing Massachusetts online sports betting reaches 15 licenses.

Why sports betting markets are limited

Two factors limit the maximum size of the sports betting industry.

First, it’s difficult to launch and maintain a sportsbook. Sports betting is a low-margin business that depends on a large base of customers to profit over time and survive downturns.

Second, there are few companies that could qualify for a sportsbook license in any state. Startups lack the financial history to prove they can guarantee customers’ money. Sporttrade pulled that difficult feat off in New Jersey by having market makers buy and sell customer trades.

New companies trying to launch traditional sportsbooks should be expected to struggle to meet state license requirements.

Market saturation could keep Massachusetts from ever having 15 apps

The exact number of Massachusetts sportsbook licenses is difficult to predict.

What’s likely is that after the initial wave of sportsbook licenses, the sportsbooks in the market will dwindle over time. The sports betting market is already saturated by FanDuel, DraftKings and BetMGM in that order.

Remaining companies are major gambling brands that draw on customers from other parts of their businesses. Ceasars Sportsbook’s and WynnBET’s parent companies have successful casinos in Las Vegas. These companies’ customers and loyalty members are ripe targets for their sportsbook apps.

Some of these companies may find continued success in sports betting by focusing on their own digital customer lists.

However, other companies are reevaluating the value of each new market. PointsBet pulled its Massachusetts application after deciding it was a less valuable use of resources than cultivating customers in their existing markets. BetRivers didn’t even apply for a license in Massachusetts for similar reasons.

Over the next few years, some of Massachusetts’ licensees may decide there’s more value in other states or businesses segments — like online casinos — and exit the Massachusetts market.

The interesting question about Massachusetts isn’t how many sportsbook licenses the state will award.

It’s how many licensees will leave the industry in the next 3-5 years.

RELATED: Which MA Online Sportsbook Will Launch Next?