The Victor Claims All

## The Victor Claims All – Athletics Wagering – iGB

iGB Commentary: Daniel O’Boyle thinks that four years after the cancellation of PASPA, the US athletics wagering market share has settled, with minimal space for ranking shifts or new participants to appear.

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The Victor Claims All
There’s a common notion that Western popular culture entered a period of inactivity in the late 2000s.

If you watch a film or television program set in the 1980s or 1990s, it’s clear what time period it’s from because the attire, technology, and music are distinct. But a film set in 2010 looks nearly identical to today. For the past decade, we’ve been pursuing sentimentality instead of creating something fresh.

In the world of American athletics wagering, there’s no question that advancement will continue: products will be significantly enhanced and new wagering methods will arise.

But in terms of market share and brand impact, we may have already reached a stage of inactivity.

The Leaders Surface
In fact, we were already most of the way there before the cancellation of PASPA: FanDuel and DraftKings established themselves as the two most apparent contenders for market leadership during the daily fantasy craze. The company that ultimately became Flutter was insightful enough to recognize this and acquired one of them.

Nearly at the same time, the introduction of internet casinos in New Jersey set the stage for MGM’s collaboration with what was then called GVC Holdings, paving the path for the eventual joint venture.

Currently, with all key players reporting their second-quarter earnings, the sports wagering scene has taken form: FanDuel is the market leader, with BetMGM and DraftKings close behind.

Following them is Caesars, then the rest of the contenders.

FanDuel appears to be mirroring the analogy in American sports, aligning in a winning formation, prepared for the contest. As declared today, the business is already profitable, and with Flutter giant backing the brand, Peter Jackson doesn’t mind continuing to advertise, while all rivals have retreated.

BetMGM’s specific results may be unveiled later, but it’s clear that it’s on the right path, with second-quarter losses dropping to about $60 million. In the online casino space, it’s the market leader, but even in the betting space, it has established itself to the point that when the two verticals combine, it’s already in a clear second place.

And BetMGM’s part-owner Entain certainly understands that after a region regulates these industries, the competitive landscape will rapidly form. After all, earlier this year, it chose to acquire Dutch overnight sensation BetCity rather than rebuild its existing brand’s market share before the country’s Remote Gambling Act came into effect.

Its undeniable that the company shares the same fervor for Eastern Europe, having already agreed to purchase SuperSport and aiming to acquire more market leaders.

Meanwhile, DraftKings, yes, is still experiencing substantial financial losses. But last Friday’s (August 5th) earnings report was a significant positive indicator. The company considerably reduced marketing expenditures compared to the first quarter, but revenue remained robust. Having a head start in aggressive marketing spending, it now appears that DraftKings has indeed cultivated some customer loyalty, which will be beneficial in the future.

Not too late, but not optimal
Most other businesses are only beginning to seriously promote themselves later. Take one of the most aggressive, and most mature in the larger US land-based market: Caesars.

No company has been more assertive in marketing than it. $3,000 sign-up bonuses seem to exist only in the dreams of bettors. At the same time, it offers a product that has gained significant market share in other regions.

However, despite a notable improvement in second-quarter revenue, it remains a considerable distance behind the front-runners, and marketing is now decreasing. While brands like DraftKings are at least offering free bets to hesitant customers, Caesars is providing its promotions to gamblers who already have a preferred sportsbook, and it’s challenging to persuade them to switch.

The scenario is similar for other operators.

As ESPNs brand has been circulating in the sports betting arena for a long time, recent comments from Disney’s CEO, Bob Chapek, have only intensified speculation. He mentioned that Disney is engaged in “long-term discussions” to “add some value around gambling” and hopes to reveal something soon.

While this appears more like an expansion into the affiliate area rather than launching its own sports betting product, even if ESPN Sportsbook were to fully launch and be powered by a truly top-notch platform, don’t anticipate it to quickly rise to the top of the market share.

Despite ESPN’s dominance in sports media, seamlessly integrating media and betting products is not simple. Penn National Gaming and 888 have both formed partnerships with well-known media brands, both companies are far smaller than ESPN, but given the impact of Barstool and Sports Illustrated sportsbooks in the initial stages of the market, it’s difficult to envision ESPN’s version being able to quickly jump to the top.

The House of Mouse
Those who believe the US market share battle will continue often mention some of the companies that could enter the market and make a big impact. One of the most significant is ESPN.

By the time they began running advertisements, forming partnerships, and matching market leaders on bonuses, customers had already moved on.

Within a realm where every prominent figure in American athletics has inked media agreements with operators, what is the promotional worth of Stephen A. Smith?

Can other enterprises make a significant impact?

If ESPN isn’t the brand power that propels them to market dominance, then other sports behemoths certainly aren’t either. Apparel giant Fanatics has the financial resources to make a big splash, but they’re likely better off acquiring a recognized market leader like DraftKings rather than attempting to go it alone or collaborating with a company that hasn’t conquered the American market.

Bet365’s global success might make them a contender, but they’re not playing the game to be a market leader. There’s no reason to believe they’d shift their attention from all their other markets to the US market, without that focus. They might expand their US operations to more states, but if so, they probably won’t be aiming for the mass market customers they do in a market like the UK.

In fact, targeting specific groups rather than the general public is often the path forward for those seeking niche audiences, casual participants, “knowledgeable” gamblers, or players within a single state.

Still up for grabs
But what about the gambling houses?

Don’t get too hopeful about newcomers taking the top spot.

Just as FanDuel took the lead in online wagering, BetMGM might be doing the same in casinos.

Although BetMGM might be tough to dethrone from the top of the online casino standings, the allure here is that there’s potentially more cash to be earned. Additionally, casinos are generally easier to accommodate more feasible brands than sportsbooks.

While a series of sports betting bills have been enacted into law, the legalization of online casinos hasn’t taken the country by storm as many anticipated. However, state legislatures won’t hold out indefinitely. As long as online casinos are prohibited in most states, funds will flow directly to illicit operators.

There’s still a battle to be fought as more states open up.

However, in sports betting, it feels like the rankings have more or less solidified in time.

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