Popular sports betting platform and gaming firm 5Dimes has shut down its service for the US market. The company will try to enter with a license in the market on a state-by-state basis and seek approval from state regulators.
5Dimes Shuts Down for the US Market, Targets Legal Restart
One of the earliest sports betting and gaming firms, 5Dimes, has announced that it is officially suspending service for the US market effective on Friday, September 25. The move is seen as a part of a broader push for entering the legal sports betting, gaming and poker markets, which have been actively legalized on a state-by-state basis since May, 2018.
Back in 2018, the US Supreme Court (SCOTUS) successfully struck down the Professional and Amateur Sports Protections Act (PASPA) allowing every state to have autonomy in deciding whether it should legalize sports betting.
With consumer attitude changing rapidly, most sportsbooks in the United States are now the recipients of attention from bettors in close to 20 states today. According to industry experts, this number is going to double within five years.
What 5Dimes is doing is effectively trying to exit the realm of “rogue operators,” which aren’t allowed to operate in the legal sports betting markets. 5Dimes account holders will have until September 25 and then September 30 to claim any leftover funds.
Should accounts go unclaimed 5Dimes will transfer those accounts to a claims administrator, which will settle any matters related to account ownership and funds.
Why Dropping Out of a Lucrative Market Now?
To people not familiar with the matter, 5Dimes’ decision may appear counter-intuitive. The United States constitutes one of the largest markets in terms of sports betting, but there are some extenuating circumstances.
First, sports bettors have always been skeptical of offshore operators, and 5Dimes is an offshore operator. That in turn means that as soon as there are legal options closer to home, loyal 5Dimes customers will most likely make the switch.
In a bid to prevent that, 5Dimes is making what it considers to be the only right move. Quitting now would give the company enough time to open negotiations with states and hopefully obtain a license.
More mature markets such as Nevada and New Jersey have iron-clad rules against operators that have run offshore business in the past five years. In other words, 5Dimes transition to an operator that is trusted and can legally bid for a share of popular sports betting markets.
The good news is that there are many states that are only now exploring the opportunity of legalizing their sports betting industries. Commenting on developments, Global Market Advisors consultant Brendan Bussmann had this to say:
“While the intent of this is good, this brings to light additional questions of who will be their U.S. partner and how they will pass suitability on a state by state basis. For those that have operated online or fantasy sports illegal in the past, some regulators have a long memory and it may take some time before they will even be able to be licensed or operate.”
In the meantime, 5Dimes will not be losing too much money. The company is also available in Europe and Asia, and it has a multitude of verticals, including poker and casino games.