SportCaller’s Cillian Barry, and Seth Young from PointsBet provide their top-three industry themes for the year
Challenger operators will exploit the wider opportunity
The DFS giants and market leaders will continue to hold sway since they have a ready-made audience in each state that opens up. Countrywide, Fox Bet and Barstool Sports are best-placed to challenge the status quo following their success with Super 6 and 66 million “Stoolies” respectively. Few others have taken a strategic approach towards building similarly-engaged audiences prior to betting regulations. That opportunity is easily facilitated by free-to-play. The focus has most definitely been on the “now” as opposed to the “next” opportunity. I predict that at least one operator will proactively pick this up in 2021.
Growth will be driven by retention
Revelations around the vast amounts spent on acquiring players around the start of the NFL season were startling, but not at all surprising. The great unanswered question is whether this huge outlay is simply feeding the wallets of those who were already active bettors? Current average-bet stakes would certainly suggest so. When this gold rush settles down, the big winner will be the operator that funnels some cash into its poor old CRM team and nails the strategy for holding on to the most players. Given that current acquisition techniques mirror those employed in European markets, it will come as no great surprise if retention strategies follow the same path.
Someone will make us stand back and marvel
This last prediction is born out of hope rather than expectation. We regard ourselves as being an entertainment industry, and that is certainly a path we should follow as we look to a more responsible and sustainable future. However, for an entertainment industry, we’ve been lacking real innovation since PASPA’s repeal. In 2021, someone will bring a product to market, built on the motivations of US bettors, that will unify our collective opinion with its brilliance. I don’t expect that this will come from one of the current leading operators, given that congested roadmaps do not allow for innovation, but instead from some talented entrepreneur whose interest has been piqued by the US online gambling opportunity.
Seth Young, chief innovation officer, PointsBet:
Greater attention on fixed-odds horseracing
This year will likely see greater debate around the introduction of fixed-odds betting on horseracing across the US. As online gaming awareness reaches all-time highs, the horseracing industry is faced with a decision to either watch its consumer economy continue to decline and cannibalize itself by maintaining its status quo, or to take advantage of the opportunity to introduce a fixed-odds style of wagering to engage a fast-growing new segment of the market. Fixed-odds wagering mechanics are much easier to understand than pari-mutuel mechanics, especially for consumers that have been wagering on a fixed-odds basis in the widespread US black market for the last few decades. Markets like Australia – where consumers have the ability to wager both pari-mutuel and fixed-odds on races – shows that these segments are highly complementary to one another and result in market growth and diversification. This ultimately leads to job creation, greater direct and indirect economic impact for each jurisdiction that adopts it, a more robust gambling entertainment experience for interested participants, and the sustainability of an exciting sport.
Online casino growth and the start of another poker boom
While sports betting has dominated the market expansion discussion in the US, online casino is quickly following behind as it becomes more widely understood that it engages a new set of interested players, is incremental to land-based operations, and is also pandemic proof. Following the passage of legislation in Michigan enabling multi-jurisdictional compacting for poker, the addressable regulated poker market in the US is beginning to creep toward a volume that may become attractive enough for more operators to consider it investable, and begin to offer a strong enough value proposition for consumers in states where poker is legal.
While the poker market has declined over the last decade, the popularity and familiarity of the game hasn’t diminished; the bottom dropped out when convenient availability in the US disappeared, discouraging the casual player. People enjoy poker and the demand still exists, as evidenced by the large, guaranteed prize pool tournaments and cash game liquidity of the gray market operators still serving the US. Look for additional states to debate both activities in 2021 and beyond.
Pick-and-shovel innovation
As legal online gaming proliferates throughout the country, a secular shift in the market will see innovative ideas emanating from vendors – new and old – with a greater frequency than ever before. The US is the largest emerging online gambling market in the world, and there are a lot of people here that enjoy a good bet. That doesn’t just include the players, but it includes the endemic and non-endemic technologists and innovators that will try their hand at developing supporting businesses and aiming to solve problems for operators around general efficiency, marketing, payments, KYC, responsible gaming, engagement, and then some.
Though the US gambling market has historically had very high barriers to entry for new gambling-related businesses, one of the benefits of strong regulation is that there are robust and explicit guidelines in place for what can and cannot be done, which effectively creates a roadmap for businesses to build around. I’ve said sports are engrained in the fabric of American culture, but so is entrepreneurship and risk-taking. To me, there’s no doubt the market will see some fresh faces pitching new and exciting ideas and taking a shot at their own American dream.
Thanks to EGR Global for their kind permission to reproduce this content from their original publication.
