Compared to sports betting, igaming is like the redheaded stepchild lacking attention. While betting on sporting events is legal in 37 states and the District of Columbia, igaming is legal in only six. Sports betting is promoted by celebrities and star athletes; igaming ads are rare.
But during Tuesday’s “How Long until Igaming Emerges from the Shadow of Sports Betting?” session at SBC Summit North America at the Meadowlands Exposition Center in New Jersey, panelists were bullish on igaming’s prospects.
“Obviously, the sports-betting footprint is much larger,” said FanDuel President Christian Genetski. “A much higher percentage of the population has access to regulated sports betting than igaming. But within our business when we think about the future, we spend as much time on igaming as we do sports betting. We know that over the longer term, it’s going to be critical to what we’re trying to achieve.”
Richard Schwartz, Rush Street Interactive CEO, noted that taxes generated last year in New Jersey and Pennsylvania from igaming were approximately $600 million.
“It’s real. It’s not in the shadows,” said Schwartz of igaming. “And it’s clearly an opportunity for this industry to grow and to be profitable because of the benefits of that category.”
Moderator Yaniv Sherman, Bragg Gaming CEO, said that the optimism initially attached to igaming has been replaced with a more realistic – and to a degree, pessimistic – outlook concerning expanded legalization in new jurisdictions. But while widespread adoption has been slow, Genetski said a number of states are learning to regulate igaming and that tax and revenue benefits are becoming more apparent.
“We’ve had good progress in states like Indiana, Iowa, and even New York this year,” Genetski said. “Illinois is another. … Trying to predict when it’s going to happen is difficult, but I think to a person, we’re preparing for that expansion.”
Genetski added that for states looking at legalizing igaming, the first and second priority is always revenue.
“At a time when state budgets are crunched,” Genetski said, “and they’re looking for resources or revenue that don’t involve raising taxes on the individual taxpayers in the state, igaming becomes far more attractive in that scenario than in one where state budgets are flush and they’re returning money to taxpayers.”
Sherman noted that land-based casino operators haven’t always been aligned with online sectors. BetMGM CEO Adam Greenblatt said that more progressive, forward-looking, land-based, gaming companies recognize igaming as “a question of when and not if.
“It’s get on the bus or get left behind,” Sherman said. “Will there be losers as we pursue a more technologically based future? For sure. But in the same way you tell people they can’t use a mobile phone because of the telephone box at the end of the road, they’re going to laugh you out of the room. It’s going to happen. I’m a free marketeer and I believe long-term that free markets will prevail and distortions to that cannot persist.”
Sherman said he views FanDuel as basically on “opposite sides of the track” from BetMGM and Rush Street. FanDuel is trying to get more traction in igaming, while BetMGM and Rush Street are looking to establish more of a base in sports betting.
Greenblatt said that while that premise may be true, what’s far more important for customers is betting with a brand they trust.
“Our challenge is becoming known in sports as the best sports experience,” Greenblatt said. “And the reality is cross-sell. We spend a lot of time and effort in moving players between verticals. Why? Because A, it produces your effective cost of acquisition and B, we can show that player that values are increased when you’re a cross-product player.
“The fact that we’re BetMGM and have a tradition and natural association in igaming hasn’t prevented us from really making an impact in sports, with sports players choosing us just to sample. And now our forever challenge will be to improve the experience in sports directly that keeps our players with us.”