Panel Bullish On Sports Betting, Eyes Rise Of Mobile Casino Gaming

A panel of industry experts all sounded optimistic on the future of sports betting but also noted the importance of online casino gaming.
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A panel of industry experts all expressed optimism regarding the future of sports betting in the United States on Tuesday while also pointing out the benefits of tying it to mobile casino gaming.

LightShed Live brought together a high-powered quintet to discuss the “State and Future of Sports Betting,” featuring FanDuel CEO Matt King, Action Network CEO Patrick Keane, Eilers & Krejcik Partner Chris Grove, Orrick Partner Jeremy Kudon, and Slane Advisory Founder Sara Slane. The five touched on a variety of subjects during the hour-plus Zoom meeting as LightShed Partners Brandon Ross, Richard Greenfield, and Walter Piecyk moderated the proceedings.

Navigating the COVID-19 landscape and beyond

Slane, who was the senior vice president of the American Gaming Association until July 2019, immediately pointed out the “huge shift for the industry to be able to move to a mobile platform, not just with sports betting but online casino.” She expects more states to open quicker, including Illinois and Michigan, and provide opportunities for operators to gain more customers.

She added that sports betting has been “a lift for the entire industry” for both mobile and the brick-and-mortar. Slane conceded sports betting tax revenue is small but she expects growth because states that haven’t legalized betting yet will want to recapture lost revenue from bordering states that do have sports wagering.

Grove also expressed optimism about growth, pointing out the revenue from sports wagering is broken into two main components: the license fees and the actual sports betting tax revenues. The former came into play earlier this month in Illinois when the state’s gaming board issued Master Sports Wagering licenses to seven casinos, which will result in payments ranging anywhere from $3 million to $10 million.

He estimated a gradual ramp-up of tax revenues from sports betting to take “three to six years before a market reaches that baseline maturity state.” Using Pennsylvania‘s model for licensing fees, Grove expects that to be a template as states look for short-term answers with online gaming to help fill budget gaps while seeing online casino gambling having more room for momentum as brick-and-mortar casinos come back.

Kudon added the allure of sports betting in terms of tax revenues for states is that “sports betting is voluntary tax revenue. People are willing to pay it.” It is found money for states, and Kudon also noted that legislators view sports betting differently than typical gaming.

The win-win of sports betting and mobile casino gaming

The panel noted the success Pennsylvania, New Jersey, and Delaware have had with online gaming during the shuttering of casinos due to the pandemic, with King observing mobile sports betting and mobile gaming are not cannibalizing each other but instead helping toward a common goal. He feels the two markets are roughly the same size, so if a state “authorizes mobile sports betting and mobile casino, you end up with a market and tax revenue that are at least 2x.

“What New Jersey is showing and what Pennsylvania is showing that having mobile sports betting and having online casino actually expands the audience for gaming; it’s not cannibalistic to the land-based casinos and actually — we did this with our casino partners — it actually gives us a platform to actually introduce whole new sets of consumers to the land-based properties.”

King expressed optimism about Michigan making an impact given the laws in place, offering it has the potential to rival New Jersey and Pennsylvania in terms of online growth. For King it was not about the state-by-state growth as much as it was the percentage of population having access to sports betting — he is hoping “35 to 40” percent of the population will have access to the online sports betting market over the next 12 months.

The ongoing rise of in-play betting

When the subject moved to in-game and live betting, the FanDuel CEO noted it represents the “majority of our bets,” shattering what he feels is the “myth that in-game betting is coming … it’s here.” King also cited a high engagement and high bet volume for in-game betting. He said FanDuel has an average of 250 offerings on an NFL game and there is still room for innovation with user interfaces as well as merging “the watching experience with the betting experience.”

Here is where Keane, whose company Action Network utilizes data, content, and analytics to help bettors as well as track their wagers, jumped in. He noted the acquisition of Fantasy Labs “informs a lot of our prop betting analysis and tools, which informs your thinking about the NBA and NFL in terms of player props. That product informs that user and that subscriber.”

Keane noted the recent rise of golf as a popular destination for in-play betting, even with a status of “a rights-holder league. We’ve seen explosion in our golf content, golf coverage, the number of people tracking bets in golf. It almost looked like an NFL Sunday in terms of engagement we were seeing with a golf match.”

What’s next?

One of the more interesting portions of the discussion came when Grove noted there is “the open question of how to make sports betting entertaining.” He pointed out at the height of poker’s popularity when it was on television, “it was actually entertaining on its own merits” and that helped provide staying power.

Grove thinks that is the fundamental riddle operators have to solve — “Can this be entertaining to a larger audience?” — and he feels the stake Barstool purchased in Penn Gaming in January could be one such way of creating such a narrative.

Slane pointed out the role regional sports networks (RSNs) — some of which are owned by teams — could play in this area in terms of advertising for operators.

“The companies want to microtarget [the audience] and the RSN is critical — could not be better positioned right now from a sports betting perspective to directly tie in to that fan base you’re trying to target in the Midwest or the Northeast, so they are extremely well-positioned to take advantage of this opportunity,” Slane said.

“I do think you will see a very close tie to leveraging that sports content now with the most powerful tool of fan engagement — sports betting — and getting closer to ingraining it.”

Image courtesy of Shutterstock.com

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