BtoBet’s COO Dima Reiderman in a recent interview with G3 Newswire spoke about the iGaming potential that currently lies in the US market.
The roll out of sports betting post-PASPA has been swift and the demand for sports betting has boomed. But is the US reliant on too few firms accounting for too large a percentage of the total market? How can other operators even hope to make an impact as FanDuel, DraftKings and BetMGM grapple over market share?
One has to start by stating that the opponunity that the iGaming industry represents in the US right now is garnering a lot of interest. Whilst One could argue that the US industry Is still In Its infancy stage business Intelligence company Mao Gambling Compliance forecasted that the US sports betting industry will generate US$6.7bn to $8bn In gross revenue this year.
When it comes to a more extensive outlook. VIXIO takes the year 2025 as a reference. The company forecasts the US sports betting market to be With $12.1bn to $I7.7bn in total annual gross revenue by 2025. depending on key state legislative developments. Meanwhile it further stated that the total revenue from all US online gambling. Inclusive of sports betting and IGaming in certain states. will reach $17.3bn to $22.6bn by 2025.
To better discern the growth one can crunch the numbers. For February. the combined commercial gaming revenue from land-based casino games sports betting and Internet gaming reached $4.2bn. resulting in a 17 per cent increase from February 2020 and up 37 per cent from a year ago.
It is safe to say that 2022 has seen the Industry’s fastest ever start to a year with $8.96bn in commercial gaining revenue generated in the first two months up nearly 20 per cent from the prodous record set in 2020. Furthermore 19 of 27 commercial gaming states that were operational two years ago saw revenue growth from February 2020.
How do you see the US operators’ market share developing in the long term? Will it continue to be dominated by a small number of operators?
If one was to take a look at the US market, we Could see the market composed of five main operators that today haw a market share of circa 80 per cent Vk are talking about Daily Fantasy Sports companies that have a base of old customers. andalsohistoric brands In the casino industry. All of these well established operators can leverage their customer base for purposes of cross selling, whilst focusing on strong retention plans to hold on to their fold of players in the future.
Of equal Importance is the very significant amount of budget that these operators are pumping in terms of marketing activities. whether it is advertising or bonuses. Thus taking in consideration all of these factors there is general consensus that the US’ major operators will maintain a dominant presence in the future maximising their first-mover advantage in the marker.
Morgan Stanley’s Thomas Allen even Stated that he expects the top five operators – Flutter (FanDuel) DraftKings, RetMGM, Caesars, and Penn Barstool – to gradually increasing their presence to about 85 per cent of the total market share. Yet this also means that the market also provides opportunities to eventually accommodate other operators.
Overall there has been a rush amongst operators to acquire a predominant market share. Is it still possible for less well known brands to gain a foothold in their respective markets?
Again, this boils down to market entry and financial resources allocated for marketing activities. There are examples of certain operators that entered late in states and they have not performed as well as expected. whether being present from day one would have resulted In a different scenario altogether.
This first-mover advantage is further augmented by market experts expressing their surprise about the customer retention that they have seen In the US.
One must bear in mind that whilst marketing costs have soared recently, data shows this is not a sustainable approach as both the heavy costs of advertising and the heavy costs of its bets severely limit the margins involved for sports betting firms.
At the same time what is so fascinating about the US market is the wealth of opportunity to cater for every type of punter imaginable. Referring to the US as a single market is not only a disservice. but also an approach which sees operators not reaping the benefits that such a diverse landscape can offer. And this is an aspect which “less established’ brands need to hone to increase their foothold in their respective markets.
The market keeps In hold players of every taste. background, and sports fandom. The audience is diverse in its passion for a variety of sports.
Talking about the US as a single market for sports betting is doing it a disservice. Like many other regulated jurisdiction – perhaps even more so – the US boasts a veritable wealth of opportunity to cater to every type of punter imaginable go be successful operators need to keep a keen eye on their audience and the sports they like to bet on. Whilst this seems simple enough, crafting a sportsbook around these requirements and respond to shifts in the audience is challenging.
How can new operators In the market adapt their approach to attract customers given the fact that the market seems to be more and more concentrated amongst a small number of companies?
It is immensely valuable for operators to know their players. and pick and choose the technology that meets their punters’ requirements. It is a must for operators to vary their approach according to the different betting habits and needs of their players. Thus. an operator running a sportsbook in a market characterized by a more savvy player might need a higher investment in their trading to address the complex nature of bets that their players enjoy. On the other hand, a sportsbook operating in a densely populated area where competition is rife might need reidentify ways of increasing their online offering maintain a high level of appeal to players. And In smaller markets where punters enjoy sports betting in a more retail environment, then a higher attention to the physical infrastructure and making use of cutting-edge retail technology can lead to increased turnover.
Operators also need to understand that men in those cases where they have their own legacy technology a modularised approach to technology by bolting on third party technology can further elevate the sports betting experience, round up their offering, and fill-in any gaps or shortcomings that their legacy technology presents. This will not only provide players with an unprecedented betting experience but will eventually power their future growth. and ensure they maintain a high level of retention.
Referring to the US as a single market is not only a disservice, but also an approach which sees operators not reaping the benefits that such a diverse landscape can offer. And this is an aspect which “less established” brands need to hone to increase their foothold in their respective markets.