As more states legalise online gambling, the opportunities for plucky European affiliates are broadening in the U.S.

Established in 2006, affiliate Gambling.com is the latest to make a notable push into U.S. markets. This week it has confirmed it is poised to enter the newly legalised New York online market, having made a strategic acquisition at the end of 2021, purchasing U.S.-facing fantasy sports news and advice site RotoWire.com from Roto Sports for $27.5m.

RotoWire has a long history in DFS and sports commentary, dating back to 1997. Then RotoNews, the website was bought by a West Coast corporation in 1999 and went bust a couple of years later. The editorial team relaunched it as RotoWire. Many of the original RotoNews team remain, which must have hinted at cultural synergies for Gambling.com, which is also led by co-founder Charles Gillespie as chief executive officer, with the other co-founder Kevin McCrystle still in situ as chief operating officer.

RotoWire president Peter Schoenke said of its acquisition by Gambling.com: “The U.S. is entering a whole new world of sports fandom and combining forces with Gambling.com Group will accelerate RotoWire’s growth. Gambling.com Group’s resources and experience will help RotoWire rapidly advance its sports betting offerings to take full advantage of this new era.”

It’s good news for RotoWire, which is now back by a strong international brand, which in turn receives instant access to RotoWire’s audience.

The markets seem happy with the move too, as Nasdaq-listed Gambling.com sees the bulk of its revenue come in from established and broadly reliable European markets, 65% of which is reoccurring.

Gambling.com (GAMB) stock is trading at low prices at the moment, but analysts are bullish on its future given the opportunity that the U.S. presents and the company’s historic growth trajectory.

One Nasdaq report said the company had recorded revenue of $11m in 2017, but that in the last 12 months it generated revenue of $42.3m. Cash flow also grew from $4.9m in 2018 to $16.4m for the last 12 months, according to the same piece.

During its November 2021 earning call, Gambling.com chief financial officer Elias Mark said: “For the years 2021 to 2023, we are targeting our average annual revenue growth to exceed 40%. In our European business, we target growth faster than [the] European gambling market over a business cycle. In the United States, we expect to take market share and be significant after in the markets over the longer term.

“At the same time, we are targeting an average annualized adjusted EBITDA margin of no less than 40%. It is important to note that our adjusted EBITDA margin may deviate from that target from quarter to quarter due to seasonality and due to investments to support organic growth, primarily focused on the U.S. markets.”

Of course, other European affiliates have also made bold moves into the U.S.; Better Collective was early to enter, for example. But now that more states have legalised, and the scale of the opportunity in the remote gaming sector is coming more clearly into view, we can expect to see affiliates take a broader approach.

It is a harder market to crack for affiliates than Europe is. The regulations are generally tighter. In much of Europe, affiliates do not need to be licensed and a lot of the player protection burden (although this is changing) falls to the operator, rather than the affiliate.

Affiliates are well advised to be cautious of over-estimating their opportunities in the U.S. too, as each state is such a particular jurisdiction. Gambling.com’s entry to New York perhaps illustrates how a strategic entry into one massive U.S. market is a wiser move than attempting to crack several smaller ones – each with their own challenges and limitations.

It is important also that European affiliates understand the language and culture of U.S. gambling, which not only differs greatly from Europe but differs from state to state. Partnering with an established U.S. sports betting website is by far the easiest way to bridge that culture gap, as well as gain a foothold using an already established audience.