What seemed so logical at the time hasn’t worked out that way. Although Europeans do have some financial interests in offshore sports books, and continue to discuss such investments as this is written, the predicted supremacy of offshore sports betting by the Euros never appeared. How did the Europeans botch their opportunity to dominate an exploding industry?

Politics: The books themselves would tell you that they were exercising caution before going into an unregulated environment. Most European companies have held back from dipping a toe in American waters due to the unsettled legal situation of sports betting in the United States. At the time the British companies were concerned with gaining favorable regulation and taxation status in their own country. Several had moved offshore to the Isle of Man, taking jobs and tax revenue away from Great Britain. As they negotiated for better tax status at home they were not terribly interested in annoying American government officials who contend that offshore and online wagering is illegal for Americans, even if the wager is being processed where it is legal. Despite the fact that these companies have nothing to answer to the US government for, they didn’t wish to rock the boat. There was little to gain in having the Feds complain to the British government about the actions of their books. The stakes were far too high for a Ladbrokes to take the principled stand that there was nothing separating them from accepting wagers on American sports if the bets were processed in a place where it was legal for them to do so. British officials eventually cut the betting tax to about a third of what it had been previously, and the major British books moved back home.

In the interim, some newer British books have began targeting the American market, but despite the tax situation being settled, Ladbrokes and William Hill seem to have very little interest in joining them. Why was this?

Structural Differences: Despite how socially acceptable sports betting is in Great Britain, it is very difficult to win there. Spreads are traditionally much harder to overcome. Even with reduced taxes, “punters”, as they’re known in Britain, are often betting into propositions that are disadvantageous by 15% or more on soccer, rugby, cricket, and the like. They also are not used to pointspreads, only odds. For example, on a Word Cup soccer game between Britain and Brazil, one gets separate odds on Britain to win, Brazil to win, and a tie after regulation. As one European bookie once told me, “We have no punters who beat us regularly. Nobody wins.”

Any organization booking American sports will have customers that beat them. American bookmakers operate on a much thinner edge, with a theoretical 4.54% advantage in football and basketball where the player risks $11 for every $10 they are trying to win. In reality, bookmakers catering to Americans often have a much thinner edge than that, due to the moving of pointspreads. For example, if the line on a football game has been hovering between 6½ and 7, most favorite bets will be at –6½ and most bets on the underdog will be placed at +7. If the favorite wins by exactly 7 it is likely that the sports book will suffer substantial losses due to this imbalance. This reduces the hold on pointspread wagering from a theoretical 4.54% to a lesser amount, although sports books actively market parlays, teasers, and other propositions that can lead them to boost that rate substantially.

Several years ago William Hill accepted bets from Americans for a short time. It was during basketball season and instead of the full college board they only took Top 25 action. Even with this limited wagering menu, their numbers were slow, and American bettors punished them. This major British bookmaker was not prepared for the combination of the thin edge of the 11-10 and the fast and furious line moves in American sports. The William Hill folks beat a hasty retreat, shutting off American players.

Cultural Differences are Highlighted: Clearly, it is much more difficult to book in the American style than in the European style. The Europeans have so far chosen not to take on this challenge. The dominance of American-backed sports books in the Caribbean, Canada, and elsewhere is no accident. In general American businesses are more willing to take on risks and meet a difficult challenge. Culturally, Europeans are much more likely to be comfortable in their business, slower to try new things and less likely to accept risks.

It is no accident that in most industries American companies are more innovative and creative than their European counterparts. Almost all the European Union countries are to some degree or other socialist, and there are can be significant governmental, social, and cultural barriers to in business. In licensing, taxes, and laws covering the workplace environment, European businesspeople often are discouraged from starting a business, expanding it, or innovating within their industry. Laws strictly regulate compensation, holidays, and guarantee European workers months of vacation each year. I have European friends who hector me over the amount of time Americans work and the effort that they put into their businesses. The European and American mindsets are decidedly different. Europeans enjoy more time off and a more active “safety net” of government mandated basic economic security. Americans have more economic upside potential and are more likely to live a financially higher standard of living. Americans have more incentive to take risks. Europeans are more likely to stay with something that is familiar and comfortable.

These cultural differences contribute to the lack of interest that the major British books seem to have in the US market. The old, established British books would need to develop a greater knowledge of American sports, hire line managers experienced in American sports, while learning to speak to Americans in their sales and marketing, wagering interface, and customer service. If they successfully did all that they could build an empire. But this empire would have to be built by winning at a narrower margin but with high volume. Some customers could beat them substantially and there is no guarantee of generating profits overall. With their European mindset, they have elected to maintain dominance in their marketplace and leave the American marketplace to others who are willing to absorb more risk.

British start-ups unlikely to take their place: The smaller, start-up British bookmakers that have targeted the American market have shown some squeamishness with their risk tolerance, with unfavorable odds and an itchy trigger finger that seems more likely to jettison winning bettors. When the Steelers hosted Baltimore in the AFC playoffs in January of 2002 one British book stopped accepting money line wagers on the popular Ravens, stating that they had “filled the market” on Ravens money line plays. Any self-respecting American bookmaker would either accept the fact that they were taking a strong position on the game or would move the line to attract action on the other side. Not these Brits, they simply “filled the market”. Taking a position would have paid off handsomely for the book when the Steelers dismantled the Ravens. This risk aversion cost the book some serious money in this instance and shows their lack of preparedness for attacking the American market.

The European Role: We’ll likely continue to see expanded European investment in the offshore gaming industry, as American financial institutions continue to step gingerly around the burgeoning industry. As Europeans are more familiar with legalized wagering, we’ll continue to see European firms invest in sports books that target the American market. Their involvement is unlikely to include giants like Ladbrokes and William Hill, however. They had their windows of opportunity to become major players in American sports betting and elected not to.

Best Sports Books for American Bettors: Despite the lack of interest in the American market by major European books, there are many well-respected sports books that cater to American bettors. The best have withstood the test of time and emerged with stellar reputations. To learn more about these sports books click here.