Business By The Books: Online Sports Betting Changing Casino Demographics

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In the years before legal online sports betting, almost every gaming conference would include a panel about how to get younger customers into retail casinos.

Many options failed: skill-based games, esports and younger-skewing IP for games rarely had a positive effect. Sometimes it would even backfire with a skill-based game taking three minutes to finish on a $5 play, which took valuable floor space from standard slot machines with a much higher coin-in rate.

As it turns out, casinos just had to meet younger gamblers where they are most comfortable: their smartphones.

Multiple operators took the time during their earnings calls to discuss how their online offerings have filled their databases with 21-to-40-somethings who are now visiting their retail properties.

BetMGM supplying customers to MGM Resorts

BetMGM accounts for about 40% of the new customers to MGM Resorts‘ loyalty program, CEO Bill Hornbuckle said.

MGM, meanwhile, is responsible for about 15% of BetMGM’s customers.

Hornbuckle said the total spent by customers that play both online and at retail casinos in the third quarter doubled compared to last year.

Caesars sports betting customers translating to retail bucks

Caesars CEO Tom Reeg was the only one to put a number on just how much its digital business is bringing to retail casinos.

“We are getting over $200 million of incremental brick-and-mortar casino play out of customers that were sourced in digital,” he said. “That number continues to grow.”

That is not bad for a company that really only started to ramp up its online offering last fall.

Read Caesars’ conference call recap.

All demographics growing for PENN except 65+

Online gambling and its younger players are having such a big impact on PENN Entertainment, the company is planning retail upgrades in favor of the younger demographics.

PENN reported a 10% increase in average daily theoretical win for rated database customers aged 21-34 compared to Q3 in 2021. That same stat is up 3% for the 34-44 range, 2% for the 45-54 range and 1% for the 55-64 range. Meanwhile, the 65+ range fell 5%.

The two youngest segments accounted for about 10% of revenue in 2017 but is close to 20% now.

“We are continuing to re-imagine our properties to appeal to this demographic with dynamic retail sports books and sports bars, third-party F&B concepts, refreshed hotel products, new entertainment and best-in-class technology, which we believe will pay meaningful dividends in the quarters and years ahead,” CEO Jay Snowden said.

Read PENN’s conference call recap.

How did sports betting stocks perform after earnings?

Take a look at how the stocks for six sports betting-related companies performed as of close Friday compared to the closing price the day before their earnings calls:

Key earnings calls to watch this week (all times Eastern):