At least one US sportsbook operator is not buying the importance of being first to market.
Casino operator Bally’s said last week it was still fine-tuning its Bally Bet product ahead of launches in New York and Arizona.
CEO Lee Fenton said the company is prioritizing quality over speed.
“We do not need to be first to market with an inferior product,” Fenton told investors at the firm’s Q4 earnings.
Bally’s thinks patience wins
Fenton said the Bally Bet 2.0 sportsbook would launch in New York and Arizona in H1 2022.
“Customers will always have choices and your first impression is more important than timing of launch,” Fenton said. “We will launch when the product is right and we’re willing to miss short-term gains to build long-term trust and value with our customers.”
“With the continued irrational spending in full flow, we have concentrated our focus on building betting products that are US-centric and easy-to-use for the mass market.”
New platform for Bally Bet
The product is built on the Gamesys player account management platform (PAM) and the Bet.Works sportsbook engine.
Bally’s acquired both companies last year and just stitched the technology platforms together.
“All of that plumbing is happening and we can now take bets end-to-end,” Fenton said. “So whereas four weeks ago, we didn’t have absolute surety on that. That is all now up and working.”
The road less traveled
That approach is almost diametrically opposed to the path taken by Caesars Sportsbook in New York.
Caesars came out the gate with TV marketing and a $3,300 promo offer. However, the product was not ready for the demand and broke down several times.
Caesars has now reversed course entirely and pledged to stop TV advertising.
First the worst?
More broadly, too, operators seem divided on the value of first-mover advantage.
PointsBet said Friday at its earnings call it was looking forward to being “on the start line” in Ontario, Ohio and Maryland.
“Before we’ve always been a share-of-wallet bookie,” PointsBet CEO Sam Swanell said. “Every client we’ve obtained we had to win off MGM or FanDuel. Here’s an opportunity to win clients first onto our platform.”
PointsBet, of course, already has a proven product, and could benefit more from being first to market.
Analysts cautious too
Analysts at Jefferies were also not convinced by the Bally’s plan. The firm downgraded Bally’s to a ‘hold’ rating, arguing that first mover advantage was “critical”.
“We’ve learned first-mover matters,” Jefferies wrote. “The Michigan market has remained 90% concentrated among the top five players consistently, despite shifts among them. Further, large players not present in MI at the outset struggle to capture share, but have achieved leadership in markets where they were Day-1-operators.”
What else did we learn from Bally’s Q4 call?
When Bally’s is ready for launch in New York, it will still shy away from heavy marketing.
“I don’t think you’ll see the same kind of tactics from Bally’s that you’ve seen from other players with significant spend above the line,” Fenton said.
Instead, the operator will look to activate customers from the Bally’s AC database. It will also utilize its free-to-play assets and the Sinclair TV networks to acquire customers steadily, rather than with a big splash.
That plan should help limit losses, Bally’s said
The Interactive division is expected to generate revenue of $125 million in 2022, with EBITDA losses of $60 million.