Just over five months ago The Supreme Court ruled PASPA was unconstitutional. (I think that’s about four years ago in US Sports Betting years!). The post-PASPA momentum has seen 8-11 states with legal sports betting (depending how you classify them). The protectionist approach taken by most states means the companies that are allowed to operate sports betting are the pre-existing gambling operators – casinos, tracks and tribes.
Even so 30-plus unique brands, including many companies without gambling licenses, now have access to the first tranche of states to allow legal sports betting with more than 10 having taken a sports bet.
How did they do this? Apart from the pre-existing Nevada operators most of these are either new to sports betting or new to the USA. This has led to an array of deals around technology, audience and regulation.
In fact I think pretty much every deal is solidifying the three main elements that are needed to be a successful sports betting operator in the USA. These are:
- market access;
- sports brand and player base;
- technology and operations.
If you start to look at deals in this context you can see why they occurred.
Let’s take Paddy Power Betfair as an example. Although as one of the few existing national US operators (racing via TVG and igaming via Betfair NJ) they did not have any sports market access or a well-known sports brand. Through their existing brands they have technology and operational experience. The deals with Meadowlands, Tioga Downs, Boyd and others give them access, and the FanDuel buyout gives them a sports brand and players.
MGM buys technology and operations from GVC in that deal, and in return gives market access, and shares the playMGM brand with GVC. Then together they are aggressively pursuing audience with large scale marketing deals such as with the NBA.
Even those with big existing databases, The Stars Group and Draft Kings, will have to spend marketing dollars to get their sports betting brand recognition mass market.
So the big media companies hold a lot of power in this market. None of these have yet announced who, or how, they will point their millions of eyeballs at. Whatever decisions they make will move the market. There are some critical deals coming.
And we can’t pause for breath. New markets are opening up (maybe 10 more states in 2019?), more brands are seeking market access, and more platforms are being approved. It will be quite a year!
Originally posted at: https://sbcamericas.com/2018/10/26/what-next-for-the-emerging-us-sports-betting-market/