On November 17, US sportsbook MaximBet announced on Twitter it is shutting down its sports betting operations. On November 16, the company sent out an email to its customers about the decision, pointing to macroeconomic conditions as the main reason.
MaximBet Informed Customers It Is Closing Sports Betting Operations
MaximBet will no longer be taking sports bets from customers as it is closing its sports betting operations. Its clients in Colorado and Indiana have until December 15 to withdraw any remaining funds in their accounts. Any remaining funds after that date will be automatically sent by check to the address registered in the account.
In the email MaximBet sent out to its customers on Wednesday, the relatively new company elaborated on the reasons behind the sudden shutdown:
MaximBet launched in 2021 with a desire to bring sports, entertainment, and betting together, all inside a lifestyle brand with a complete focus on the end user. While making great strides in offering customers a completely unique player experience, our ability as an early-stage company to compete in a market where operating costs far exceed revenue, even among the top operators, is not sustainable.
MaximBet also highlighted that its top priority at the moment is to help customers in Indiana and Colorado withdraw their funds and close their accounts in the smoothest and quickest possible way.
Considering the high licensing costs involved in launching a sports betting business and the fact that sports betting is a low-margin operation in principle, it becomes more and more difficult for smaller and start-up companies to compete in an aggressive market dominated by a few major stakeholders.
Therefore, it is expected that more sportsbooks will have the same faith as MaximBet in the upcoming months.
MaximBet Had Big Expansion Plans for the US Market
Less than two months ago MaximBet went live in one more US state, adding Indiana to its Colorado offering.
The company also had big plans for expansion in other US states including Iowa, New Jersey, and Ohio, among others. These expansion plans were part of a partnership with Caesars involving a total of 10 US states.
Additionally, MaximBet made agreements with major star rapper Nicki Minaj and Colorado Rockies Charlie Blackmon aka “Chuck Nazty” in June and April respectively to become brand ambassadors for the company.
In 2021, Carousel Group partnered with media company Maxim to create the brand MaximBet with Carousel Group investing $50 million in Series A funding. The brand was targeting the young male demographic and tried to position itself somewhere in the middle of entertainment and sports betting.