As the NFL kicks off in earnest this weekend, Alan Greenblatt, CEO of BetMGM, told an investor conference that the incumbent operators will continue to dominate the sports-betting landscape and aren’t afraid of such newcomers to the market as ESPN, which will launch in November.
FanDuel enjoys the number-one market share in the U.S., followed by DraftKings and BetMGM. Caesars Sportsbook is fourth. Penn, which previously had a deal with Barstool and recently teamed up with ESPN, has been ranked fifth.
Greenblatt is confident in BetMGM and the other incumbents’ shares, given technology improvements and rollouts and rising barriers to entry in the business.
“I’m more excited now than I can remember being in my role at BetMGM without reservation,” Greenblatt said Thursday at his session of the Bank of America Gaming and Lodging Conference that was livestreamed by MGM Resorts International. “I feel like the commencement of the football season marks how we feel internally about the relaunch of BetMGM. BetMGM is back and you’re going to see us much more forcefully in the upcoming weeks and months.”
In his wrap-up, Bank of America analyst Shaun Kelley said the conference focused on the competitive landscape and impact of new entrants, including Penn’s deal with ESPN. Like BetMGM, Penn is optimistic about its potential, highlighting ESPN’s brand awareness and the impact of its new tech platform.
ESPN Bet will run on the current Barstool Sportsbook platform and offer same-game parlays, micro bets, and customized offers based on betting behavior, Kelley said.
“Penn believes the key to success in online sports betting is a strong brand with equity with sports fans and best-in-class product,” Kelley said in discussing takeaways from the conference. “Penn thinks the agreement with ESPN Bet meets these criteria and can help propel them to be a top player in online sports betting and icasino.”
Kelley said it’s Bank of America’s understanding that ESPN Bet is a strategic priority for both ESPN and Penn. The ESPN Bet agreement is differentiated from ESPN’s prior advertising agreements, since Penn will gain access to top talent exclusively promoting ESPN Bet, access to social-media platforms, a fantasy database, and odds attribution across ESPN and ABC.
“ESPN sounds committed beyond just advertising, with allocated resources to help support product integrations,” Kelley said.
When asked by Kelley to discuss ESPN Bet, Greenblatt didn’t seem worried and without naming them directly, said Penn will be happy they got out of a high-ticket fixed-cost commitment that wasn’t performing. That’s not a place BetMGM wants to be.
“They will get a ton of samplers, but the product experience is the same as it is today and the impact on that player experience is visible,” Greenblatt said. “I’m happy to compete against them.”
Greenblatt said the sector “is hard and shouldn’t be underestimated. Gaining meaningful ground against the incumbents will be extremely challenging.” He said he has great respect for all of those organizations, including ESPN Bet, along with Bet365, which continues to expand in the U.S. They have a lot to overcome, he said.
“We’re doing this business and they’re not. To make meaningful ground on the leaders who’ve been at this for five years, refining every day and doing their best every day, to come at this from a standing start, you need differentiated assets that are better than most who are participating and have operational solutions — product, people, customer service, risk, and compliance — that don’t let your players down. We’ve been refining all of those dimensions every day for five years.”
In other takeaways from conference, Kelley said the other incumbents are all pushing their tech capabilities forward and noted that they’re seeing a rational promotional environment to start the NFL season. “The bottom line is product and tech remain the key competitive advantages and operators don’t seem overly worried about a renewed spike in irrational promo activity this fall.”
When it comes to online sports betting, Kelley said Caesars executives feel good about their position heading into the football season. They discussed how their product differs by their ability to stream NFL games in their app starting week two this season. Caesars also sees organic growth opportunities in online sports betting by increasing structural hold to 7.5%-8% over time from 6.4% in the second quarter, though its brick-and-mortar presence likely keeps it below the double-digit hold rates FanDuel and DKNG are targeting.
“Caesars still doesn’t have shared-wallet capabilities, but this is a key product priority for 2024,” Kelley said.
As for icasino, the launch of Caesars Palace Online has about 10% share of icasino downloads and management is pleased with this early response, despite limited marketing, Kelley said. Caesars hopes to drive share from 5% currently to closer to 10% through the standalone app, enhanced game mix, and more customizable offerings.
DraftKings was optimistic about its product lineup and momentum heading into the first weekend of NFL as well, Kelley said. The company has a recently refreshed app, with further improvements and refinements around measuring the progress of each leg of a parlay, dynamic odds and sliders, availability of in-game bets and parlays, and improving market depth.
“DraftKings suggested that the promotional landscape remains rational heading into the opening of the NFL season, with most competitive offers in line with or below last year’s levels.”
DraftKings remains encouraged by its mix and activity and doesn’t see any structural reason it can’t reach the same low-double-digit hold rates that FanDuel is discussing achieving in the market over time, Kelley said.
DraftKings indicated competition has been their number-one investor question, but reiterated their confidence in their product and technology advantages, given their 10-plus years of experience with mobile-first technology in DFS and sports betting, 1,500-plus engineers, and single- account/single-wallet functionality that provides a big boost for new launches. They also cited rising marketing efficiency and national scale.
In his write-up about BetMGM executives, Kelley said hold rates have been an upside surprise in the U.S. and can exceed other global markets. Also, BetMGM has made substantial improvements, including single-account/single- wallet rollouts.
Britain’s Entain, a joint-venture partner with BetMGM, announced in July that it’s acquiring U.S-based
Angstrom Sports, a sports modeling, forecasting, and data-analytics company.
“Angstrom’s technology should allow for longer bet availability for in-game betting and substantially more unique and customizable betting combinations that can meaningfully improve BetMGM’s market depth relative to prior offerings,” Kelley said.
Last week, BetMGM announced the premiere of its new campaign series starring actor Jamie Foxx in conjunction with the start of the NFL season. Foxx, who had been recovering from health issues, has already gotten a lot of attention on social media with the promotion, Greenblatt said.
“Heading into this football season, BetMGM thinks irrational capital allocation in regard to customer acquisition and marketing is largely behind us,” Kelley said. “That said, MGM thinks targeted promotions can still be a valuable tool for acquisition and retention if deployed properly.”
Last week, BetMGM announced it’s the world’s first online casino to offer the Buffalo slot. It’s available to play at BetMGM in New Jersey and the operator plans to launch the game in the near future in Pennsylvania and Michigan.
“It’s a global first for online and without reservation one of the most popular games in retail slot play,” Greenblatt said. “One of the core pillars about who we are and how we differentiate ourselves is the omnichannel. This represents the perfect intersection between what gamers have been doing for 15 years and what we’re inviting them to do with us in the future.”
In 2021, BetMGM took the lead in igaming in New Jersey and asserted themselves from nothing, Greenblatt said. Now, it’s number three in aggregate with 17% market share.
“I have the sense that work we’ve done in product — speed and stability, improved navigation, a whole new front-end design system making things more intuitive, a deeper content offering, more live markets, and signature bets only available at BetMGM because of Angstrom — all of this gives me great excitement for meeting and exceeding the guidance we’ve given to the market,” Greenblatt said. “We’ve already said the bottom end is $1.8 billion to $2 billion and during the first half we did more than half of that from a revenue perspective. The wind is in our sails.”