It’s Time for Entertainment to Take a Page From Sports Books
ON THE UP: SPORTS BETTING
Momentum for sports betting is back and is the future of entertainment. Why? Sports betting has all the elements that engage viewers: gamification, fandom, community, fast paced, adrenaline rush of real time wages, endless opportunities (you can bet on anything) and mobile friendly (iGaming).
- FanDuel president says sports betting is now ‘a mainstream part of live entertainment’. In 2020, FanDuel’s sportsbook handle (the total amount of money wagered at the sportsbook) grew 86% year over year while the company’s revenue grew by 81% to $896 million.
- Since Caesars and Eldorado Properties completed their $17.3 billion merger in 2020, William Hill has opened 12 sportsbooks across Nevada, Iowa, and New Jersey. “As our exclusive sports betting operator, William Hill has added immediate value to Caesars Entertainment’s portfolio of properties nationally,” said Tom Reeg, CEO of Caesars Entertainment, Inc. “Our agreement with ESPN, as the largest provider in sports content, completes what is sure to be a momentous partnership in gaming and sports wagering.”
- The sports betting and iGaming market is one of the largest and most exciting growth opportunities in the U.S.A. today,and BetMGM is emerging as a long-term leader. BetMGM began 2020 in just 3 markets and is now currently in 12 states. Expect it to be in 20 states by the end of 2021 with access to approximately 40% of the U.S. adult population.
- DraftKings CEO Jason Robins said in their Q4 earnings report that their success is in part due to their innovative approach through the content integration (e.g. the Match 3, Mike Tyson versus Roy Jones Jr. boxing match, relationships with major media companies like ESPN and Turner sports, etc).
- FuboTV (which sits at the intersection of sports streaming and wagering) is the cornerstone of 3 megatrends: the decline of traditional television viewership; the shift of TV ad dollars to connected devices; online sports wagering.
Sports betting and “Wager-tainment” is key to engaging younger audiences. Gone are the days of “2D” entertainment (watching on a single flat screen). We consume content across multiple devices and are distracted from our latest TV binge because we are scrolling on our phones.
Sports betting creates an ecosystem of content across multiple devices — “4D” entertainment. All at once, you read Sports Gambling Guide to find the best deals, write in your group chat to see what your friends are betting on, read highlights and place real time bets ALL on your phone while watching the game on TV. Your attention is actually more focused on the game rather than distracted.
ON THE DOWN: DAY TRADING
When the stadiums went dark, day trading surged in momentum because it is fast paced, competitive and community driven (the Davey Day Trader effect)
Why is the sports betting industry now reclaiming its place while momentum for day trading declines? Passion & fandom.
Armchair investors don’t bleed the colors of the companies in their portfolio. Sports betting is back because fans can apply the “skills” learned from day trading to bet on sports teams and players they are actually passionate about (and not just who wins or loses — they can bet on every element of the game).
THE DECODE
Here’s how different companies and organizations across the sports betting industry are leveraging the 5 Drivers of Momentum.
DISRUPTION: Professional sports leagues are leaning in and embracing legal sports betting as a way to re-engage and re-energize fans.
NBA Commissioner Adam Silver, NFL Commissioner Roger Goodell, and MLB Commissioner Rob Manfred are all for it.
NBA: NBA Commissioner Adam Silver shook up the professional sports world back in 2014 when he came out in favor of legal, regulated sports betting on his sport — but at the federal level. Now others are following suit.
MLB: Caesars Entertainment announced on May 6 a partnership with the Arizona Diamondbacks to launch mobile sports betting in Arizona and build a first-class sportsbook and bar concept on the plaza adjacent to the team’s home. Caesars also finalized a multi-year agreement with Major League Baseball to become an Authorized Gaming Operator of the league in the years to come.
INNOVATION: Sports betting affiliate marketing platform Sports Gambling Guide is innovating by providing a consumer first approach. They combine education & advisory with social media sports entertainment to ensure the consumers choose the best deals and make smart bets.
- Education & advisory: They provide avid sports fans with up-to-the-minute articles and stats on players and teams that can lead to profitable bets and real-time odds from several online sports bookmakers to give their customers the best available odds.
- Social media first: Troy Paul (23) founder of SGG, says social media and content creation is their key to engaging 21–25 year olds. He thinks back to the type of sports content that captures his own attention on social and ensures that’s what they are putting out to entertain & educate their sports betters.
POLARIZATION: State by state discussion & debate over legalization.
Colorado accepted its first online and retail wagers in 2020 and has quickly turned into one of the most robust markets with all the major players involved, including DraftKings, FanDuel, BetMGM and BetRivers from day one. In Sept. 2020, Colorado joined Nevada, New Jersey, Pennsylvania and Indiana among states to record more than $200 million in monthly betting handle. Australian-based PointsBet opened its North American headquarters in Denver, helping what could be a major player in U.S. sports betting.
North Carolina is pushing for legalized sports betting. Why? The NBA and NFL team owners said it was time North Carolina legalized sports betting and prevented residents from going out of state to bet. They said that a legalized betting market would provide bettors with more safety and security and help eliminate illegal betting operators who are currently thriving in the state.
Massachusetts has long stalled sports betting bills — seemingly anti-sports gambling despite being a lucrative market (the nation’s most lucrative per capita state lottery and continuing with the more recent launch of full-scale commercial casino resorts).
The House Ways and Means committee excluded sports betting revenues from its upcoming fiscal year budget draft, signaling lawmakers’ expectations that legal wagering won’t begin in the next 18 months. This preliminary move early on in the budget process doesn’t mean sports betting’s 2021 legalization hopes are already over, but it’s the latest indication the state’s years-long impasse is no closer to resolution.
Massachusetts has higher-than-average household incomes and education levels, both factors that positively correlate with sports betting interest. That, plus some of the nation’s most iconic and beloved professional sports teams, creates one of the most coveted potential U.S. markets.
New York is stuck in the middle of the polarized debate. New York will approve a limited-operator, government-bid online sports betting model that was backed by Gov. Andrew Cuomo and opposed by most state lawmakers and the gaming industry at large. Under the plan, which will be passed as part of the state’s $200 billion fiscal year 2022 budget, the New York Lottery would issue requests for proposals from two mobile betting operators, which would then subcontract out licenses (or “skins”) to four sportsbook operators.
STICKINESS: There is nothing more sticky than fandom for sports teams, players and the influencers inspiring the bets.
Brands like Penn National Gaming are making their mark by tapping into influencer marketing to differentiate & engage cult followings.
Penn plans to make it possible to bet against Dave Portnoyand Dan “Big Cat” Katz — major sports betting influencers who constantly post bets on social media. Big Cat even makes parlays for his fans. Penn is leveraging the fact that many already tune in to see how they are betting to introduce an added layer of competition and create FOMO.
SOCIAL IMPACT: Legalized sports betting is benefitting local markets by generating taxes, providing greater economic impact, and creating jobs.
Legalizing sports betting won’t just bring the law in line with American attitudes and desires — it will also deliver powerful economic benefits: possibly generating $8 billion in local taxes, creating hundreds of thousands of jobs and adding $22.4 billion to the gross domestic product.
When one segment of an industry thrives it usually brings more enterprises with it.
- The betting industry will be responsible for the development of accompanying services (restaurants, cafes, retail & ecommerce, etc.) that will indirectly profit around 7 billion dollars from it.
- Betting legalization will directly create more than 85 thousand new jobs and another 130 thousand jobs in the surrounding indirect businesses.
- The legal sports gambling industry is estimated to generate more than 3 billion dollars annually just for the marketing efforts.
THE TAKEAWAY
Sports betting will grow all sports.
Media & entertainment companies that want to engage the next generation can take a page from the gamification and fandom of sportsbooks by creating entertainment that gives viewers a reason to feel invested.
