After two years of virtual conferences due to COVID-19, the gambling industry is gradually reverting to pre-pandemic form, as top industry executives become less reticent to gather for high-profile, in-person events.
A bevy of C-suite execs, lobbyists, and industry strategists assembled this week in Midtown Manhattan for the EGR North America East Coast Briefing, the first time the event was staged in person in more than 16 months. At a location blocks away from the Empire State Building, Tuesday’s briefing was predictably dominated by discussion of the rapid ascent of the New York sports betting market.
As of April 22, New York bettors had wagered $5.6 billion at the state’s legal sportsbooks since the Empire State launched mobile sports betting in January. New York has already generated tax revenue of $191.7 million from online sports wagering, shattering early expectations. The EGR event was held on the 11th floor of the Midtown Loft & Terrace on Fifth Avenue, an area that has emerged as the sports betting capital of New York in large part because of its high concentration of sports bars.
There has been little loyalty from customers for a particular brand in the crowded marketplace. This is partly due to sportsbook bonus hunters. Over the first three months of legal sports betting in New York, the average bettor placed wagers on at least three distinct apps, said Jeff Laniado, a senior account executive at Optimove.
Laniado cited research from Betting Hero which found that New York customers on average used 3.3 mobile sports betting apps statewide over that period, far above the average of 2.8 apps in neighboring New Jersey. While 23% of respondents used four apps over the span, only 6% of pollsters used six, according to Betting Hero. Just 4% of all respondents used seven apps, while 17% limited themselves to a single app.
FanDuel, DraftKings break from the pack
Two industry heavyweights, FanDuel and DraftKings, appear to have separated themselves from the rest of the pack. Among respondents, 29% of those surveyed chose DraftKings as their favorite brand, slightly topping FanDuel, which came in second with 28%. BetMGM, which ranked third among the eight New York licensees, garnered 12% of the vote.
FanDuel and DraftKings have also distanced themselves from the field in terms of functionality and ease of use, with FanDuel ranking first among parlay bettors and DraftKings leading the way on single bets, according to Ernie Ropas, director of research at Betting Hero.
As Caesars’ promotional spending wanes, FanDuel and DraftKings have become the clear beneficiaries. Last week, for instance, the two sportsbook operators were the only ones to report gross gaming revenue in excess of $5 million. After setting a weekly record with $22.1 million in GGR for the week ended April 22, FanDuel has generated $110 million in revenue since January’s launch, translating to a whopping market share of 29.2%.
As of Friday, eight of the nine mobile sports betting licensees in New York have gone live, with Bally Bet the lone holdout. At present, BetRivers, PointsBet, WynnBET, and Resorts World also offer mobile sports betting in New York.
Fanatics the ‘elephant in the room’
Sports betting stocks have endured a retracement of sorts over the last six months, with some top names declining more than 50% from their previous highs. One factor for the downward trajectory involves questions about the long-term profitability of the industry’s top sportsbooks, as the companies engage in an expensive marketing war to acquire customers. While stocks remain at depressed levels, the industry eagerly awaits Fanatics’ sports betting debut.
The launch of Fanatics’ sports betting division, Laniado said, is “the big elephant in the room” for the rest of the industry. Valued at $27 billion in its latest funding round, Fanatics is diversified enough that it does not need to be profitable with its sports betting arm right away, he noted. In 2018, Fanatics signed a 10-year deal with the NFL that gave the company exclusive rights to distribute all Nike NFL jerseys.
Eilers & Krejcik Gaming reported this month that Fanatics began the development of a sports betting platform after acquiring source code from Amelco. While multiple media outlets confirmed the story, Fanatics denied that it had a deal in place regarding the acquisition. Amelco has sold numerous copies of its source code to top U.S. operators, most notably Hard Rock, Fubo, FOX Bet, and PlayUp.
.@Fanatics doesn't have a deal in place with Amelco…at least not yet.
But perhaps the most interesting nugget in this story is the fact that it's all but certain the e-commerce giant has market access lined up and just hasn't announced it yet. https://t.co/V5ZHlxkxwf
— JohnWallStreet (@HowieLongShort) April 21, 2022
Typically under such arrangements, a sportsbook will enter a revenue sharing agreement and pay an upfront fee to Amelco for a copy of the code. Then, gradually, an operator such as Fanatics will put its own stamp on the product as the company builds out its in-house product.
Lloyd Danzig, founder and CEO of Sharp Alpha Advisors, drew parallels between the Fanatics deal rumblings and DraftKings’ acquisition of SBTech several years ago. Much like DraftKings’ handling of the SBTech integration, Fanatics can “rip up” the source code acquired from a company such as Amelco, then build on top of it, Danzig explained.
“That process of ripping up source code and building up from scratch is quite lengthy,” Danzig told Sports Handle.
The timing of Fanatics’ national sports betting launch is still unclear.
“Launching by the start of NFL season would likely require Fanatics to have quietly secured a multi-state market access deal in parallel to their search for a technology platform,” Danzig added.
Reaction to Ridley suspension
While representatives from several top sportsbooks and the NBA took part in the conference, the NFL did not send any executives. Last month, the NFL suspended Atlanta Falcons wide receiver Calvin Ridley through the end of the 2022 season after the receiver placed a series of NFL wagers in violation of the league’s gambling policy. Sports Handle later learned that Ridley made several additional wagers on top of the parlays that were initially reported.
SCOOP: Falcons star receiver Calvin Ridley bet more than just $1,500.
The betting activity consisted of:
– Six bets on a game involving the Falcons for a total $3,900 risked
– One 11-leg parlay for $300 at 481/1 odds to win $144,000
— Brett Smiley (@brettsmiley) March 11, 2022
On a panel Tuesday, NBA executive Scott Kaufman-Ross was asked for his reaction to the Ridley suspension. Although Kaufman-Ross did not comment specifically on the suspension, he noted that the NBA has significantly increased its player education training on gambling as part of its rookie onboarding process.
“We make it very clear that not just players — but coaches, trainers, team employees, and league employees — are prohibited from betting on the NBA,” said Kaufman-Ross, who serves as senior vice president, head of fantasy & gaming for the NBA.
Kaufman-Ross also appeared on a panel with Lindsay Vellines, senior manager, league & team marketing at FanDuel. Vellines addressed the ubiquitous nature of sports betting advertising, a question she said the company grapples with every day. The issue became particularly acute in New York during the NFL playoffs, when nascent sportsbook operators inundated the airwaves with commercials.
“It’s important that we’re around in 20 years,” Vellines said. “We’ve learned the lessons that other markets have learned for us.”
I haven’t seen an online sports betting ad in almost 7 minutes. Am I dead?
— Conan O'Brien (@ConanOBrien) January 9, 2022
Ifrah Pitch award
Last year, Pittsburgh-based company Hedge captured the inaugural Ifrah Pitch competition, an award given annually to a promising gaming industry startup. Hedge bills itself as the “Acorns of DFS” through its spare change investing concept.
At Tuesday’s conference, Hedge CEO Jackson Fitzgerald provided the audience with an update on the company’s upward trajectory. Ifrah Law founder Jeff Ifrah also presented Skrmiish, a peer-to-peer esports gaming platform, with the 2022 Ifrah Pitch award. Skrmiish defeated a talented field that included BitBoss, a crypto payment processing company, and Gambless, a mobile app that assists bettors in their recovery from gambling addiction.
SHORTLIST ANNOUNCED for the 2022 Ifrah Pitch Competition! Vote for the startup you think deserves to win $5K and 5 hrs of legal consultation from Ifrah Law! Winner announced at the EGR East Coast Briefing on April 26! Vote here – https://t.co/4n1WBHBsiT #gaming #sportsbetting pic.twitter.com/6zkHcOY0NU
— Jeff Ifrah (@jifrah) April 21, 2022
Following the conference, Rush Street Interactive captured the 2022 Operator of the Year honors at the EGR North America Awards banquet. Rush Street is the parent company of BetRivers and PlaySugarHouse.com. BetRivers, which is live in 13 U.S. states, launched this month in Ontario.
“It is an honor and especially meaningful for RSI to be recognized by the gaming industry’s top leaders for our passion to develop innovative and intuitive betting experiences and for always prioritizing earning and retaining our players’ trust,” Rush Street Interactive CEO Richard Schwartz said in a statement.