Virtual sports have not taken off in the United States as Inspired Entertainment or many others had hoped.
CEO Brooks Pierce said on Inspired’s Q1 earnings call Thursday morning that expectations for virtual sports may have overshot reality.
“I think, I would say that we’re probably a little frustrated at the growth that we would have expected from Virtual Sports,” Pierce said. ” … You know, that might have been aggressive to think that it was going to be a mid-teens percentage as a part of online sports betting. It’s probably more like maybe mid- to high-single digits is probably the right number to think about.”
Virtual sports offer betting on simulated games that last a few minutes in length. Inspired boasts a catalog of virtual sports with real league trademarks, including the NBA, NFL and NHL.
Where is Inspired live with virtuals?
Inspired only has a handful of U.S. customers right now. It most recently launched games with BetMGM and Borgata Online in New Jersey. Those are just a few weeks into launch, but so far there is already a noticeable difference between how the games perform with BetMGM in Ontario and in New Jersey, Executive Chairman Lorne Weil said.
“I think, the results from BetMGM in Ontario have been very good,” Weil said. “Probably not quite as good as we’d hoped so far in New Jersey, but we’re working with BetMGM, in particular, about where we’re positioned on the site and some promotional stuff. I think it’s a little early.”
Bet365 is the only other U.S. sportsbook live with Inspired’s victuals, but that could be changing.
“You know, it doesn’t happen overnight, but we certainly feel very bullish, and we’re having some conversations, you know, with some of the other big sports betting operators, I think, that are looking to broaden their portfolio,” Weil said.
Not just a sports betting product
Inspired’s pool of potential clients is not limited to sports betting operators. It is already live with its virtual sports products in three lotteries: Pennsylvania, Virginia and Washington D.C.
“Without going into a lot of detail right now, I can tell you that we’re seeing some very interesting developments with some of the most important lotteries in North America regarding the opportunity for virtual sports there,” Weil said. “I think definitely as we move through this year, we’ll see a couple of very meaningful developments that I think will be a tipping point for the virtual sports.”
The potential for virtuals in the lottery segment is “underappreciated,” Pierce added.
“We would expect, over the next six to 12 to 18 months, having some pretty meaningful contribution coming from [lotteries] as well,” Pierce said. “Even though the virtual sports business is relatively flat, there’s a number of opportunities that we see that we think can get that business back to growing”
