- Endeavor Group is the latest to abandon ship on the flat-lining US sports betting market.
- OpenBet’s customer base has grown significantly over the past year–just not in the US.
- Endeavor is perhaps best known as the recent ownership of the UFC and WWE.
Remember the optimistic days right after the Supreme Court struck down PASPA? The days before juiced in politicians, bumbling regulators and cronyism destroyed the US sports betting business? Endeavor Group sure does–that was back in 2021 when the multifaceted holding company dropped $1.2 billion for sportsbook technology provider OpenBet. Endeavor is now looking to sell OpenBet along with sports data business IMG Arena. When a company like Endeavor that ranks among the best anywhere at making money folds their hand you know the US betting market is swirling down the toilet bowl.
Endeavor Group has confirmed that its sports betting and data businesses, OpenBet and IMG Arena, are up for sale as part of the company’s broader strategy to divest non-core assets. This decision comes in the wake of Endeavor’s acquisition by Silver Lake Technology Management, which was first announced in April. As part of this acquisition, all Endeavor assets, excluding its TKO and WME businesses, are being prepared for divestiture.
In a trading update released on Thursday, Endeavor disclosed that it has already initiated talks regarding the sale of OpenBet and IMG Arena. Notably, both businesses have been excluded from the company’s results for the second quarter of 2024, categorized as discontinued operations. Consequently, no financial data for the Sports Data & Technology segment was provided for this period.
However, despite the impending sale, OpenBet has reported significant growth, demonstrating the strong performance and potential of the business. Over the past year, OpenBet has experienced a 40 percent increase in its global customer base, highlighting its continued expansion and appeal in the sports betting market.
Jordan Levin, Chief Executive of OpenBet, expressed pride in the company’s achievements under the Endeavor umbrella. “OpenBet has consistently advanced the vision of delivering an ecosystem that reimagines safe betting entertainment for billions of sports fans. Reflecting on our growth trajectory within the Endeavor network brings me immense satisfaction,” Levin said. He also noted that the association with Endeavor has provided a valuable platform to accelerate OpenBet’s strategic initiatives, contributing to the impressive growth seen over the past year.
Levin remains optimistic about OpenBet’s future, even with the anticipated change in ownership. “As we build on this very solid foundation, I’m very excited about what the future holds for OpenBet and confident that we will maintain our track record of innovation and excellence regardless of future changes in our ownership structure,” he added.
OpenBet has a storied history, having been acquired by Endeavor Group (formerly known as Scientific Games, now Light & Wonder) in late 2021 for $1.2 billion. Prior to that, SG acquired OpenBet from NYX Gaming, which had itself purchased the business from Vitruvian Partners in 2016 for £270 million. Vitruvian Partners originally acquired OpenBet in 2011 for £208 million.
In the first quarter of 2024, Endeavor’s Sports Data and Technology segment, which includes OpenBet and IMG Arena, generated $90.7 million in revenue. However, the segment also reported an Adjusted EBITDA loss of $9.5 million, reflecting the challenges faced in the increasingly competitive sports betting and data industry.
As Endeavor Group prepares to divest OpenBet and IMG Arena, potential buyers will be evaluating the robust growth prospects and established market presence these businesses offer. The eventual sale of these assets will mark a significant transition for both companies as they seek new ownership that can further capitalize on their market positions and drive future innovation.
This move by Endeavor Group underscores the ongoing consolidation and strategic repositioning within the sports betting and data sectors, as companies like OpenBet and IMG Arena continue to adapt to a rapidly evolving industry landscape. The outcome of these divestiture efforts will likely have a lasting impact on the competitive dynamics of the global sports betting market.
