Opinion: How Colorado Sports Betting Launch Will Look
Legal Sports Report

Analysis: Who Benefits From Colorado Sports Betting Starting Without Sports?

Colorado sports betting

Colorado sports betting is pushing ahead with a May 1 launch date despite the absence of actual sports.

It’s at odds with the choice made over in Washington, D.C., where the Lottery will wait until sports return to launch its platform. Doing the opposite of D.C. is probably the smart move when it comes to sports betting, though clearly that wasn’t Colorado’s rationale.

Dan Hartman, director of the Colorado Division of Gaming (CDOG) said he surveyed operators about launching on May 1 and found, “We have some operators that are excited about getting started even though it’s a slow time for sports.”

In fact, there are four CO sports betting apps expected to be live on May 1. That’s out of 17 currently scheduled to launch at some point, according to the Denver Post.

The first four live will be:

  • FanDuel
  • DraftKings
  • BetMGM
  • BetRivers

Benefit of being first in Colorado sports betting

In terms of initial sign-ups, there will be plenty of eager bettors looking to download a betting app on May 1 even without major sports. For a lot of gamblers, betting itself is the product, not the sport.

A 1-in-4 chance of being the Colorado sports betting app of choice for these customers is a lot more attractive than 1-in-17. These bettors are also more likely to be the recreational customers that operators crave.

It’s worth mentioning too that US customers have proven themselves a bit more loyal than European customers.

Why US customers tend to stick more

That’s likely because of extra barriers to switching, as customers have to provide social security numbers each time they sign up for an account. It means players are more likely to stick with their first app, and are thus more valuable.

Beyond that, there are operational advantages to being live early. Chiefly, there’s more time to troubleshoot.

As Roar Digital CEO Adam Greenblatt puts it: “We are able to ensure platform and product stability prior to the major ramp-up of sports. There are also marketing, operational and compliance processes to bed in. The sooner, the better.”

Plenty of customers up for grabs

However, that’s not to say that operators in later launch waves won’t have a good chance of success. For one, Colorado has made the sign-up process as straightforward as possible to help encourage a true competition.

Customers are incentivized to download multiple apps for bonuses and promotions. From there, they can work out what they like best.

“I don’t think the head-start really matters that much,” said Jason Trost, CEO of Smarkets, which is aiming to go live in late May. “I could be overly optimistic but I think it will come down to product and we will do well. The DFS companies have ancient products. I think their advantage is overstated.”

Early doesn’t necessarily equal best

While early customers are important, they are still a minority of the overall player base. US sports betting activity is currently at about 20% of its pre-coronavirus levels, according to recent figures from Kambi.

Therefore, the real competition will start in the build-up to NFL betting season.

“Brands like Circa Sports might be ‘live’ but not really live,” says Joe Brennan, the CEO of betting and fantasy firm SportAD. “They’re more likely to rely on passive traffic, and have to conserve their marketing dollars until September.”

In the meantime, operators can tap up the database of their local casino partners.

“Hitting that is the most efficient customer acquisition plan,” Brennan said. “Along with aggressive PR about their NFL contest, futures and futures parlays.”

Native marketing plans in focus

That kind of plan could apply for several Nevada sportsbooks, including Superbook USA. Operations VP Jay Kornegay says the Superbook Colorado launch has been slowed by the ongoing stay-at-home measures. He expects to be up and running for football season.

Kornegay declined to share specifics on the company’s plan of attack, but it’s a safe bet to assume the world-famous Supercontest will be a part of it. The company is hoping to secure approval from CDOG to run a Colorado version this year.

The Supercontest, and equivalents, can help smaller companies generate buzz without dropping seven figures on marketing campaigns, as market leaders are expected to do.

Will first movers hold customers?

Ultimately, Colorado going live on May 1 will benefit first movers, who can snap up some key core customers and test their products in a relatively quiet period.

However, those who miss that first wave will still have their opportunities if they can get a smart acquisition plan in place for football season.

And in reality, even that timeline is relatively unimportant. In the UK, Sky Bet took nearly a decade to figure out its business model, and from there it exploded. The US market is still in its relative infancy, and the ultimate winners and losers won’t be decided for years to come.

Brad Allen
- Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.
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