One of next big trends in legal sports betting will make it look less like sports betting and more like a casino game, Chris Grove predicts.
“Sports outcomes can easily drive RNG or RNG-like games,” Grove said, pointing to slot-like games based on historical horse racing. “Sports betting has a number of problems. Casino is the answer to almost all of those problems.” RNG refers to the random number generator used in slot machines.
Grove, once a professional poker player, is now CEO of American Affiliate, an affiliate-marketing company for the U.S. online-gambling market; he’s also co-founder of venture-capital firm Acies Investments, which focuses on sports gambling and technology, and partner emeritus at Eilers & Krejcik Gaming, where he started the firm’s sports-betting practice and online-gaming research. He spoke Thursday at the AGS GameON Customer Summit at the Hard Rock Hotel and Casino in Hollywood, Florida.
Grove foresees the “casinofication” of traditional sports betting as a way to attract more bettors, increase profits, and smooth out the “really high peaks” and “deep valleys” during and after major events.
He noted that on earnings calls with stock analysts, DraftKings and FanDuel executives emphasize same-game parlays. Those involve multiple proposition bets on an individual game – for example, the over-under on the total score of a football game, passing yards for each quarterback, who scores first, and so on.
“Same-game parlays tend to be much higher margin than a traditional sports bet or even a futures bet, and they are very close to RNG-like activity,” Grove said.
“You’ll see more and more operators do whatever they can to take almost all of the skill out of the process,” he said. “It’s not hard to imagine how an auto-picked 12-way parlay within an inning of baseball would become a product that consumers would simply click on and then play in a very similar way to how they might play a slot machine. The events will unfold in front of them in real time, even as the consumer is basically passive in terms of their input.”
He called such parlays “the one clear answer” for sportsbooks to show they can generate profits.
Innovation in the “awful” payment system sportsbooks offer is inevitable, Grove said.
“Most people are surprised … how hard it is to actually fund an account at the regulated online sportsbooks and online casinos in the U.S,” he said. “It’s very difficult to make money from consumers when they cannot give you money.”
Allowing cryptocurrency in gaming would be attractive to a generation of consumers, Grove said, and several states are looking at the idea. Wyoming has approved such a measure and Colorado is considering it. Regulators in several major gaming states are more open to the idea, he said, and this week PayPal made it easier for its users to store, sell, and trade crypto.
“The sportsbooks and the state markets that embrace payments innovation will outperform the U.S. market at large,” he said. “Payments innovation is not only happening, but happening rapidly – nothing, and then everything all at once,” as states rush to duplicate the success of those making the changes first.
Grove foresees the sports-betting world broadening as non-gaming companies become involved.
“Once you bring in new brands with different goals and different audiences, they will think of sports betting in a different way,” he said. A fan-affinity company such as Fanatics would want to increase sales of merchandise and collectibles. A crypto exchange would use sports betting to attract customers to its own platform. SportsTrade is a virtual stock exchange that allows users to buy and sell virtual shares of professional teams and athletes.
Nongaming companies will have different views of how apps should look and work and how to interact with customers.
“They’re the same underlying game, but different experiences,” Grove said. That means operators will have to analyze what their sportsbooks customers want.
“To assume that you can have a one-size-fits-all solution to sports betting is to leave customers disappointed and money on the table. And I think the brands that are coming into the market now recognize that.”