Igaming was on everyone’s minds at last week’s SBC Summit at the Meadowlands in New Jersey.
As Truist Securities analyst Barry Jonas put it, “While digital gaming valuations remain under pressure, we believe there are still a number of reasons to be excited for the future.” Although he allowed that the spread of igaming from state to state had been slower than anticipated, Jonas was bullish on its potential, particularly with regard to “the advances in content it will bring.”
For Jonas, it remains a question of when rather than if, given the much larger revenues pulled in by igaming than online sports betting (OSB) in states where both are legal.
“Igaming has continually provided more promising revenue results for operators and states, given the ‘vs. the house’ approach is more dependable than leaving sport outcomes up to chance,” Jonas wrote, estimating the total addressable market — when mature, around 2030 — for Internet gambling to be $16 billion.
Another proponent of this outlook was Bally’s Corp. Chairman Soo Kim, who expressed confidence in Bally’s igaming brand, especially after the integration of Gamesys.
As for OSB, Kim professed to be pleased by Bally’s omnichannel approach, as exemplified by its partnership with Sinclair Broadcasting. He noted that four billion consumer impressions had been made through Bally’s Regional Sports Networks, adding that other igaming operators now want to advertise on Bally’s media platform. (Another “material positive” for Bally’s, according to Jonas, was the Oakland Athletics’ reported interest in land on or near the site of the Tropicana Las Vegas for a new baseball stadium.)
Panel discussions at the Summit “focused on the longer-term importance of brand power to help sustain customer loyalty,” with Bally’s espousing its brand-consolidation strategy, while Penn National Gaming (Barstool Sports, theScore) and DraftKings (Golden Nugget Online) were exponents of the multi-brand approach. “Current thinking is,” Jonas wrote, “igaming offers more leeway for multiple brands … as opposed to sports betting, where there has been sizable investments in brands — many moving to a national stage.”
Participants also believe that FanDuel and DraftKings will move over time into the land-based-casino sector (as DraftKings has already done in East St. Louis). Also, it was felt that technology Goliaths such as Google and Amazon would “eventually join and disrupt the gaming space.”
Although the current trend is toward vertical integration of gaming product and associated tech stacks, Jonas did not entirely agree. There is, he reported, “a belief that full-scale vertical integration is not for everyone. With the difficulty of migration to a new platform and the challenges in staffing, execution, and time, panelists believe it really depends on the scale and risk appetite of the operator. … Some believe that as the market matures, viewpoints will shift and operators may look to move integrated assets back out of house — much like Europe.”
One of the international markets where igaming is not happening as quickly as initially thought is Canada. An anticipated nationwide launch by year’s end has now been dialed back to Ontario by March. Canadians are considered hardly new to igaming, as a large illegal market already exists, but “operators will now be able to offer increased safety and protections to bettors.” Those operators are still awaiting the promulgation of license fees and tax rates, although the Canadian igaming model may ultimately differ from the one in the U.S.
Sports bettors up north are also expected to behave differently. One cultural difference noted was that Canadian fans are more attached to players than teams. Another was that much less interest could be expected toward NCAA football and even the NFL.
Speaking of the NFL, the SBC Summit coincided with the rollout of the league’s first responsible-gambling TV ads, featuring veteran coach Steve Mariucci, spots that will run once per game.
“Panelists throughout the conference stressed the importance of player protections through responsible gaming and how it begins and ends with the operators in the market,” observed Jonas.
The message was seconded by an unusually forceful warning from American Gaming Association President Bill Miller about the dangers of regulatory intervention if sports-betting ads are not curbed, calling the present clash on the airwaves an “unsustainable arms race.”
