Eggs In One Basket
Fanatics New Jersey market share plummeted last month, dropping from over 31% in April to 2.3% in May. Did DraftKings reclaim its high value VIP?
The Bulletin Board
NEWS: Fanatics sees its New Jersey market share plummet in May. The possible reason: A VIP customer returned to a competitor.
NEWS: Evidence from Ontario: Brand awareness and trust matter a lot.
WEEKEND CATCHUP: Gambling.com American Gaming Awards; MLB umpire suspended; Phil Ivey wins #11.
NEWS: Three years later, Connecticut soft-launches online lottery.
AROUND the WATERCOOLER: Will we get a Florida sports betting decision from SCOTUS today?
STRAY THOUGHTS: The wisdom of Confucius.
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Fanatics’ New Jersey Market Share Plummets
One of the storylines Straight to the Point has been following is the sudden rise of Fanatics Sportsbook in New Jersey.
In recent months, Fanatics has consistently achieved double-digit market share in the Garden State, including 23.5% in March and 31.6% in April—the latter was good enough for second place overall in the market.
The consensus belief is that Fanatics successfully pulled one of the biggest sports bettors in the country away from rival DraftKings, per Eilers & Krejcik (a newsletter sponsor):
“But perhaps most remarkably, multiple channel checks said the swing was driven largely by a single customer, described to us as ‘the biggest losing player in the regulated market by a mile.’”
That run came to an end in May.
It appears the VIP that was the catalyst for Fanatics ascent has either taken a break or, more likely, moved back to DraftKings, as its market share jumped from 18% in April to 28% in May.
One bettor is purportedly causing these swings. I repeat, one bettor. That begs the question, will VIP programs be the next point of regulatory interest?
As I wrote in my feature column titled, Pulling Back the VIP Curtain:
“Reining in sports betting marketing is a hot topic in responsible gambling circles. Cutting down on ads. Ensuring ads aren’t targeting underage or vulnerable populations. Changing the terminology used in advertisements. These efforts are all well and good, but they miss a glaringly obvious opening that no one seems to want to close: The VIP customer.”
Or, as Jamie Salsburg tweeted more than a year ago, “The current wave of sports betting regulatory response is WILD! But just wait until someone introduces them to the use of VIP schemes.”
It’s All About the Bass Brand
Brand awareness matters. FanDuel and DraftKings are the runaway leaders in the US sports betting market, but that isn’t the case North of the Border, in Ontario. According to Eilers & Krejcik estimates, “BetMGM is top dog in the Ontario market… with a ~20% share of the combined OSB and online casino market.”
If you’re wondering why, I would point to something I’ve noticed since New Jersey online casinos went live more than a decade ago: Known, trusted brands tend to win out. There’s a lot of chatter about product and marketing, but at the end of the day, overcoming a known, trusted brand is difficult and takes time.
For most of its existence, New Jersey’s online casino and poker market was dominated by local, familiar brands until sports betting came along and upset the apple cart. It wasn’t the big online companies controlling market share. It was the local brands that bettors knew and trusted: Borgata, Golden Nugget, and even Philadelphia-based SugarHouse Casino.
Focusing solely on sports betting, when FanDuel and DraftKings got into the online sports betting business, I was confident they would be able to compete and even rise to the top of the heap. The reason? The two DFS brands were synonymous with wagering money on sports. When you hear the words DraftKings or FanDuel, even back in 2018, the first thought that comes to mind is sports betting — or sports contesting if you worked for one of these companies.
As EKG noted in its The EKG Line newsletter on Ontario, “BetMGM CEO Adam Greenblatt credited four things: the strength of the MGM brand in Canada, a strong Android product where Canada over-indexes on Android phones, strong brand ambassadors like Wayne Gretzky, and concerted investment from day one of the market.”
The explanation that sticks out to me (since the other three reasons all hold true in the US, too) is “the strength of the MGM brand in Canada,” and perhaps more importantly, the weakness of the FanDuel and DraftKings brands, which were prominent in the US due to our fascination with DFS.
And it’s not just MGM. As EKG notes, “Other significant NGR shareholders in the province in CY23 include Ontario Lottery and Gaming (via OLG.ca), Penn Entertainment (via theScore), and bet365.”
Penn’s theScore app had such low brand awareness in the US that it was pulled from markets, yet in Canada, it’s one of the top performers—the same/similar products, different results — the reason: brand.
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Weekend Catchup: Gambling.com Awards; Umpire Suspended; Phil Ivey Wins #11
American Gambling Awards 2024: The nomination process for Gambling.com’s American Gambling Awards is now open. These are probably the most legitimate awards in the industry (many others tend to fall into the pay-for-play category). The judge’s panel is a who’s who of industry bigwigs, and rather than the typical “show up to our event if you want to be considered,” Gambling.com does things in reverse. “In lieu of a traditional awards event, Gambling.com Group will host the 2024 American Gambling Awards winners, judges, and other invited luminaries at an exclusive VIP dinner in New York City on November 21.”
MLB suspends umpire for violating gambling policy: MLB umpire Pat Hoberg has been suspended for violating the league’s betting policies. According to MLB, although the investigation “did not find any evidence that games worked by Mr. Hoberg were compromised or manipulated in any way, MLB determined that discipline was warranted.” Hoberg is appealing the suspension. Based on MLB rules, Hoberg likely bet on MLB games that he was not working. The story comes soon after MLB handed down a lifetime ban to Tucupita Marcano, who is accused of placing 387 baseball-related bets totaling $150,000 between October 2022 and November 2023.
Phil Ivey wins #11: Phil Ivey is now alone in second place on the all-time World Series of Poker bracelet list with 11, following a win in a 2-7 Triple Draw event. Ivey had been in a four-way tie for second place with Erik Seidel, Doyle Brunson, and Johnny Chan and hadn’t won a bracelet in ten years. As impressive as 11 bracelets, Ivey is still six behind Phil Hellmuth, who has won 17 bracelets in his career.
Connecticut Soft-Launches Online Lottery
Connecticut’s online lottery is now in the soft-launch phase.
The launch is a long time coming, considering Connecticut legalized online lottery sales in May 2021, alongside mobile sports betting and online casinos. Mobile sports betting and casino apps went live in October 2021, but online lottery would take several more years.
Connecticut Lottery Corporation director of legal and business affairs for sports betting, Andrew Walter, recently talked to Lottery Geeks about the process, saying, “Online sports betting is a faster product to stand up.”
“With online sports betting, the major players now have the same app in every state, and then they make adjustments on a state-by-state basis,” Walter told Lottery Geeks. “For internet lottery, this was a custom-built app for our unique bill that passed… So, after a long procurement process to find a vendor, that vendor had to start from scratch and create a bespoke app for this.”
Connecticut is one of 17 states that has authorized online lottery products:
Connecticut – Subscription and draw games.
Georgia – Subscription, Draw, and instant win games.
Illinois – Subscription, draw, and instant win games.
Kentucky – Subscription, Draw, and instant win games.
Maine - 13-week minimum subscription - payments by mail.
Maryland - 13-week minimum subscription.
Massachusetts - Three-month minimum subscription.
Michigan – Subscription, Draw, and instant win games.
New Hampshire – Subscription, Draw, and instant win games.
New Jersey - Subscription and draw games.
Pennsylvania – Subscription, Draw, and instant win games.
Rhode Island – Subscription, Draw, and instant win games.
Virginia – Subscription, Draw, and instant win games.
Washington D.C. – Subscription, Draw, and instant win games.
New York – Two-week minimum subscription length.
North Carolina – Subscription and instant win games.
North Dakota – Subscription-only.
Stay tuned for an upcoming feature column on online lotteries.
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Around the Watercooler
Social media conversations, rumors, and gossip.
The Supreme Court met Thursday to decide whether to hear the Florida sports betting case. We may find out today.
In his X thread, attorney Daniel Wallach lays out the impact and potential timeline for all three possibilities.
The case has significant ramifications for tribal gaming and online gambling in general. It centers around a long unanswered question: Can a state and a tribe enter into a compact that permits online gambling outside tribal lands? The Florida compact permits it, so long as the servers are located on tribal lands.
West Flagler says no. Another critic of the idea is the aforementioned Daniel Wallach, who wrote in a 2021 Forbes column:
“This arrangement, however, brazenly flouts the 1988 federal law which allows states and Indian tribes to enter into compacts for Class III gaming activities, such as sports betting. That federal law—known as the Indian Gaming Regulatory Act (or “IGRA” for short)—mandates that any gaming activities authorized under a tribal-state compact occur only “on Indian lands,” which is specifically defined by IGRA to mean “all lands within the limits of any Indian reservation” or any lands held in trust by the United States for the benefit of any Indian tribe…”
During a roundtable discussion I hosted for Gaming Law Review (paywall), Marc Dunbar, a law professor and attorney representing the Seminole Tribe, compared the issue to tribal horse racing:
“You have states that have recognized horse racing within their state to be part of the legal parimutuel wagering offerings and allow intrastate simulcast wagering to occur on the parimutuel horse races occurring at tribal facilities. That is done via state law… There has not been any question that when a parimutuel wager occurs, it is effectuated based on the law of the host location. That’s been litigated in Florida and has been affirmed. It’s been litigated in lots of states and has been affirmed. Separate and apart from it, federal laws allowed the states to essentially define what wagering is within their jurisdiction.”
Dunbar argues that if a state decides that servers on tribal lands are permissible, then that is the definition of a legal wager. According to Dunbar, this would not create a free-for-all, as other laws would still prohibit interstate or international betting and would only apply in states where a compact asserts servers on tribal lands are okay.
Stray Thoughts
Apropos of some comments I made on the Indian Gaming Association’s New Normal webinar series last week (see tomorrow’s newsletter), I give you the following Confucius quote: “It does not matter how slow you go as long as you do not stop.”