Some smaller US sports betting operators are starting to realize turning a profit is not as easy as they might have thought in the early days.
888, which partnered with Sports Illustrated for SI Sportsbook in 2021, is the latest company to change its plans. It wants to focus on what Chief Strategy Officer Vaughan Lewis called the “unsexy sweet spot,” which is older men that like playing online casino.
The move makes sense for a company like 888 given its online casino experience. It also highlights the reality that iGaming is a crucial part of running a successful online gambling business.
Top sports betting brands make profit difficult
Lewis said at 888’s Capital Markets Day it is time to change plans after a year’s worth of information:
“Our original plan here was to build a nationwide, sports-led operation in 12 to 15 states. It’s become clear to us that the intense competition in sports betting and the dominance of the top four brands means it will be very difficult to deliver positive returns without evolving our plan.”
The evolved plan is to push news and content from Sports Illustrated to its users. 888 will also be “laser-focused” on the older male demographic, Lewis said. According to its presentation, 888 sees average revenue per user from the 61 and older demographic six times higher than the ARPU from 21 to 38 year olds.
SI Sportsbook also does better with the 39 to 60 year-old demo than the younger demographic the big operators fight over. That demo has an ARPU about four times higher than the 21 to 38 year olds.
Will more operators shift before shuttering?
The US sports betting landscape will end 2022 looking different than it did at the beginning of the year.
Three operators – Churchill Downs’ TwinSpires, Fubo Sportsbook and MaximBet – closed operations. Kindred, meanwhile, pulled its Unibet brand out of Iowa to better focus on states that include iGaming.
There could be more consolidation in 2023 when some of the biggest sportsbooks including BetMGM, Caesars and FanDuel expect to be profitable for the year.
MA retail sports betting license discussions
The Massachusetts Gaming Commission is diving into the three applications for retail casino sportsbooks this week.
Monday’s meeting runs from 10 am to 1 pm ET and allows the public to weigh in on the three applications. The partially redacted applications are posted on the commission’s website.
Tuesday through Thursday’s meetings are consideration and possibly a vote on each of those retail MA sports betting applications. PENN Entertainment‘s meeting is Tuesday, MGM Springfield‘s Wednesday and Wynn‘s Thursday.
IL pro teams could get sports betting licenses
An Illinois bill would eliminate the middle man and let sports teams get sports betting licenses directly.
HB 5847 could be a negative for sportsbooks in the long run as it puts the negotiating power in the hands of the teams. Currently, teams and/or arenas can negotiate sports betting agreements with live IL sportsbooks.
The bill would allow seven licenses for the state’s seven professional sports teams. A four-year license would cost $5 million.
