In an overview of igaming and online sports betting (OSB) published Friday, Truist Securities analyst Barry Jonas praised last week’s job cuts at DraftKings and Bally’s Corp. DraftKings pink-slipped 3.5 percent of its staff, focusing on overseas operations, while Bally’s shed 15 percent of its workforce, slashing its interactive division.
While Wall Street reacted positively to the DraftKings cutback, with DKNG stock prices rising 10 percent, BALY shares lost three percent of their value on the news.
“While unfortunate,” Jonas opined, “we see these moves as a necessary positive to reach sustainable economic levels before both divisions turn profitable.”
The other headline was that while December was “strong” for OSB, wagering was down slightly, while igaming “set a record for the third straight month.” The decrease in handle was despite four weekends of NFL play (the same as 2021), college basketball, regular-season NHL and NBA games, and more than one-third of the World Cup, including all of the knockout games. Gross gaming revenue derived from sports betting fell 13 percent to $798 million, reflecting an eight percent hold.
New York led all states in sports-betting handle, with $1.6 billion in December, followed by New Jersey’s $1 billion and Nevada’s $788 million. Illinois, which recorded billion-dollar action in November, has yet to report.
Internet casinos engendered $483 million in gross gaming revenue in December, a 25 percent year-over-year increase and a four percent improvement from November. Michigan nosed out New Jersey for the lead for the first time ever, $153 million to $152 million, in two states dominated by BetMGM.
Pennsylvania trailed with $137 million and the newest market, Connecticut, was far back at $28 million. West Virginia and Delaware contributed $12 million and $1 million respectively.
Bally’s continues to hover incrementally below 3.5 percent of market share in New Jersey, while Pennsylvania is led by an agglomeration of DraftKings, BetMGM, and Barstool Sports.
Although some Wall Street analysts maintain that handle is a questionable metric for OSB, Jonas used it to measure market performance in sports betting. By that yardstick, FanDuel’s 39 percent puts it out front of DraftKings’ 31 percent. Non-legacy providers BetMGM and Caesars Sportsbook enjoyed 10 percent and nine percent market share, respectively. Barstool captured three percent.
Promotional wars in OSB appear to be declining, with spending down 19 percent from December 2021, although it ramped up from November. Maryland’s OSB launch appears to be a roaring success, with $63 million in revenue in November, increasing to $71 million in December. Much of that is going right back out to players, with promotional spending by DraftKings and FanDuel reported at $69 million in November and $49 million the following month. By contrast, the launch in Kansas, in total, saw promo outlays by all operators of $105 million and $66 million over the same two-month period.
December i-lottery downloads in six states (Pennsylvania, Michigan, Illinois, Kentucky, North Carolina, and Georgia) were down after a record November. Gerogia, whose provider is International Game Technology, was out front, trailed by North Carolina and Kentucky, with the Pennsylvania bringing up the rear.