Pinnacle Sports Pulls Out of US Market

PinnacleSports.com, one of the industry's largest online sports betting operations, has voluntarily pulled out of the US market.  40% of their business is believed to be European and Asian based.

It is not known why Pinnacle pulled out, however, it should be pointed out that despite their solid online business, developed through precision European marketing and its wide reach among professional sports bettors, Pinnacle had not gone online until after 2000.  They were one of the last sportsbooks operating offshore to do so (along with Royal Sports and Bowmans, the later of which also announced last month they would no longer be taking on US clients).

Pinnacle apparently realized they had enough of the European market share that accepting bets from the US was no longer necessary for them to stay in business.  However, pulling from the US will hurt their growth and bottom line significantly during the short haul.

Affiliates in particular will be seriously hurt by this announcement.  Many affiliates rely solely on PinnacleSports due to their excellent customer conversion ration (Pinnacle had been offering -104 reduced lines).

For some of the more established affiliates, Pinnacle was known to pay out six figure commissions annually. 

The following message appeared on the PinnacleSports.com website Thursday morning:

Effective Immediately...

After careful consideration, Pinnacle Sports have chosen to voluntarily exit the U.S. market. Accordingly, wagers will no longer be accepted from clients within the U.S. as of Thursday, January 11, 2007.

Those clients who are affected will be required to withdraw their balances using the Cashier of their account. We assure all our clients your balances are available and Pinnacle will continue providing our international clients our same great value.

Of primary concern to some offshore bookmakers conducting business within the US in recent days is that some individuals connected with a major gambling sting two months ago in Queens, New York, may be providing authorities with information about other gambling firm owners.

Two days ago, Heritage Sports - a much smaller "credit based" business out of Costa Rica - announced it too would stop accepting wagers from US citizens, though that company Thursday afternoon revised its statement to affiliate partners saying that they would no longer accept new deposits from US customers.  The latest statement suggests that current US customers will stay be able to play with Heritage.  The owner of Heritage was once a partner in PinnacleSports.

PinnacleSports.com is located out of Curacao, however, some of the gambling firm's larger customers were believed to have been caught up in the recent gambling "sting" out of New York City. 

We will continue to follow this story as it develops. 

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Christopher Costigan, www.gambling911.com

Originally published January 11, 2007 11:02 am ET
Revised January 11, 2007 8:21 pm ET