In the raucous 2014 film Neighbors, Zac Efron portrays Teddy, a party-hearty fraternity heartthrob with chiseled abs and alpha-bro status. Nearing graduation and not having focused much on scholastic pursuits, Teddy attends a campus job fair, where he quickly realizes that in order to thrive in the post-collegiate world, he’ll have to play by the rules and grow up fast — to traverse the gulf between Ted Rocks and TED Talks, if you will.
aside, the Gold Rush period in sports betting’s maturation process has become less golden, as operators turn from showering potential bettors with free credits to figuring out how to acquire customers at a more reasonable price and pivot toward profitability.
Meanwhile, with sports betting now legal in over half the country, state regulators — in self-policing will keep federal intervention at bay.
Hence, it’s time for Teddy to put a shirt on — and the stakes couldn’t be much higher.
“The best thing operators can do is really two things,” said Joey Levy, founder and CEO of the microbetting platform Betr. “One is to continue to approach the proliferation of sports betting and casinos in this country as a true partnership with the states and regulators. The second thing is operators need to continue to remind themselves that this is all about entertainment value, just exhibiting caution and conservatism with advertising and product efforts.
“We all collectively have a pretty profound responsibility to get this right.”
Profitability now a priority 6z5p5v
Levy could be considered something of a surprising voice of sobriety when it comes to such matters. For starters, his Betr business partner is the boxer and social media provocateur Jake Paul. Then there’s the fact that Betr’s main objective is to get customers to wager on individual plays or occurrences within the course of a sporting event, because simply betting on the end result (or even the halftime score) isn’t enough.
But Levy has countered such concerns by being proactive on the responsible gambling front.
“We’re the first and only operator to voluntarily ban credit card deposits and the first and only operator to limit the amount young consumers between the ages of 21 and 25 can deposit,” he said. “I’ve said from day one that we want people to use Betr because they view it as an entertainment product. We don’t want them to use Betr due to a disproportionately large amount of promotions. We don’t subscribe to that being the ideal business strategy and want to be one of the first to achieve profitability.”
ditching the “risk-free bet” promotional language that’s since been banned in multiple states. But with each state rolling out its own unique regulations, hiccups are liable to afflict even the most careful operators.
“No two states are the same, and that brings with it a set of challenges about how we manage the requirements for launch and longer ,” said Jill Watkins, FanDuel’s senior commercial director. “It’s why we focus heavily on working cross-functionally to ensure that marketing, compliance, RG, and other teams are all aligned.”
Casting an eye toward the future, Cory Fox, FanDuel’s vice president of product and new market compliance, said, “Over time, we may see more uniformity in sports wagering regulations as states learn from one another. One area where we would love to see uniformity is in responsible gaming helplines.
“Multi-state marketing assets currently need to include a variety of helplines for each jurisdiction, which can make it confusing for customers. Particularly audio reads, such as on podcasts, have become very difficult, as just reading the helpline information takes a significant portion of the allotted time.
“A single responsible gaming helpline with a simple number, like 1-800-GAMBLER, would be easier for operators to implement and would be much clearer for customers.”
‘Ohio set the tone’ 4r3f4n
Regardless of how the industry got here, responsible gambling being top of mind for sports betting operators is undoubtedly a good thing.
“We’re putting RG language in absolutely everything right now,” said Jason Sylva, director of partnerships at Betfred Sports, a well-established UK operator that’s more of an upstart in the U.S. “Ohio set the tone. Everything we’re putting out on social, any call to action, we’re being safe and starting to cover for all states.”
When asked if he can envision a day when the federal government wields a heavier hand in gambling regulation, Sylva said, “Personally, I think it’s just a matter of time. But with that said, we’re a different market.”
In order to stave off federal involvement in the industry, Sylva advised, “Books can start partnering with RG companies. We partner with Wager Score. They’re providing what’s essentially a FICA score for betting, so you can see exactly what you’re betting or losing. For the younger generation, kids are gonna hear and learn about sports betting and gambling like they hear about sex.”
As for how his sportsbook manages to compete in such a crowded marketplace, Sylva said, “I would say the market is beginning to level out, in a sense that the promo offers aren’t as big or frequent. I think that puts smaller books like Betfred on more of an even playing field.”
But as it stands, he added, “The customer, there’s still no loyalty. It’s still, at this point, ‘Who’s gonna give me something?’”
Gaming consultant Bill Allsup of RubinBrown LLP agrees with Sylva. Dividing sportsbooks into tiers, with Type A being the top of the heap, he observed, “The Type C’s are doing a little better. The Type B’s will improve. The Type A’s have this crazy mindset of building market share, but what’s the market you’re building? ‘We want you as our customer, but the only way we can get you is this crazy bonusing.’
“I’m a sports bettor. I was in Vegas before PASPA. I was thinking it would be a Vegas-centric mindset — we’re gonna spread out. I go to New Jersey and saw the offers and thought, ‘This is crazy. This is never gonna work out for these guys. The switching cost is too low.’ The idea that you’re trying to get a customer and you’re gonna be loyal to one brand, it’s just nonsense. I don’t understand why FanDuel is so dominant. I don’t think their product is appreciably better. They’ve done well with marketing.”
Stretching dollars, connecting locally 236z6i
For sports betting aficionados in Las Vegas, Colorado and a handful of other states.
“We try to be as creative as we can,” said Jay Kornegay, the SuperBook’s executive vice president of race and sportsbook operations. “We stretch every dollar and are smart about our spending. It’s different for every operator, but for us, we work hard to spend wisely.”
“We don’t do promos, we don’t do free bets, we don’t do a lot of traditional advertising,” said Jeff Benson, Circa’s sportsbook operations manager. “We highlight the world’s largest sportsbook and Stadium Swim.”
But that approach will only get Circa so far in the view of Allsup, a Colorado resident.
“Circa, their advertising was never really relevant, and that’s why I don’t think they’ve gained much market share,” said Allsup, referring to the state in which he lives. “From a sports bettor mindset, I could care less how the book looks on my phone and computer if I can get a better price somewhere else.
“What Circa’s done as far as the dumbed-down app and the limited amount of options is probably the smart move, but their advertising — ‘we take the biggest bets’ — they don’t really have a connection here. I don’t think a bettor thinks to themselves, ‘Oh, that’s that crazy sportsbook in Las Vegas.’ I think it’s kind of a disconnect.”
While the SuperBook and Circa have operated in Colorado for years, Louisiana later this year.
“In some cases, we were being opportunistic because there were available licenses. Others were strategic,” said Sean Phinney, ClutchBet’s senior vice president of marketing. “We’re fully aware of the difficulty of carving out market share. We know we’re not gonna compete on spend. We look at it in the context of a two- to four-year span — how do we carve out 1 percent, 2 percent, 6 percent in the next six months?
“We’re building very grassroots local partnerships — the Dubuque Fighting Saints in Iowa and other lower-tier leagues. Venues where we forge longer-term partnerships, where we build out ClutchBet lounges — a great presence with targeted sports fans in key venues. Local events — the FRYfest, where the local communities celebrate the start of football season. The men’s local rec softball teams — how do we gain awareness with that audience?
“It’s being persistent with these types of partnerships that we believe can help us gain the awareness that we need at much less cost than you would typically spend on TV and other activities.”
‘A more granular understanding’ 6e1b4y
On its face, Tally is a company that runs branded, free-to-play trivia and prediction games for various sports teams, leagues, and betting operators. But running these games provides collection of data — data that can be used to determine someone’s involvement or interest in legal sports betting and how best to personalize their experience.
“What we’re seeing is sportsbooks have gone from a crazy growth industry to one that has to prove that invested money is being used wisely,” said Tally Chief Technology Officer Rupert Huelsey. “Sportsbooks are trying to find ways [to acquire customers] beyond classic ads on websites and promotions that get bigger and bigger. We know that people who come to our games: (a) like sports and (b) like to predict sports. We know how frequently they come and how good they are. We can create much smarter segments than a classical r can. We have a more granular understanding of this audience.”
Huelsey said his company has found that there’s a limit of 20-25% of Tally s who engage in sports betting, with another 50-75% saying they don’t really know how sports betting — the terminology, the math — works. In order to try and bridge that gap, Tally recently launched a simulated betting feature that allows people to “wager” without putting real money on the line.
“We can tell you if you would have put $25 on this bet, you would have won $37,” he explained. “In order to grow the existing market, you have to have a way that’s experiential, that explains how moneylines work. Even if you’re intrigued by sports betting, understanding it is the big hurdle.
“For us, free-to-play is interesting because you can reach people who aren’t reachable through the classic sports betting advertising stuff. That’s ultimately where we believe people can capture more revenue and additional entertainment money. Educate and create and experience around sports — for us, that’s the key to expanding and increasing penetration.”
