Is There No One Else?
A look at the US sports betting "Challenger" brands that are vying to become legitimate threats to FanDuel and DraftKings.
The Bulletin Board
NEWS: Four sports betting brands are trying to push past BetMGM and Caesars to challenge FanDuel and DraftKings. Here’s how they are doing.
BEYOND the HEADLINE: Bet365 has announced a new Denver HQ and plans to employ 1,000 people.
QUICK HITTER: VGW will cease operations in Connecticut after receiving a cease-and-desist in February.
NEWS: Disgraced former Jacksonville Jaguars employee who stole $20 million from the team’s virtual credit card program is suing FanDuel.
AROUND the WATERCOOLER: Putting a (small) dent in the offshore sports betting market.
STRAY THOUGHTS: Hurricane Helene, some real stories from the poker community and how to help.
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Checking On the Four OSB Challenger Brands
As the calendar flipped to 2024, I targeted three second-wave sports betting operators to keep an eye on. they were Fanatics, Bet365, and ESPN Bet. I figured it was time to check in to see how they are doing and add a fourth “Challenger” brand to the mix.
As I wrote about ESPN Bet in January, ESPN Bet was the biggest unknown of the three: “The strong numbers indicate a lot of interest, but how much interest will remain after initial curiosity evaporates along with all that sweet, sweet promotional money?” We are still waiting to see how ESPN Bet fares in the final quarter of 2024 after product upgrades and enhanced integrations with ESPN — and its recent launch in New York.
My thoughts on Bet365 have largely been realized as the company has ramped up its US presence and spending, which has led to better results. As the EKG Line newsletter recently wrote, “Bet365 pushed a major UX update at the start of September, in what looks like yet another sign it is taking the US opportunity increasingly seriously.” However, as I wrote in January, if it continues to run well behind FanDuel and DraftKings, “How long will Bet365 willingly spend to compete for a sub-10% market share in the US?”
If ESPN Bet was the biggest unknown, the third operator I looked at, Fanatics, has produced the most mixed results. The Fanatics app rarely enters the conversation (outside of a New Jersey blip) when sports betting operators are discussed. Still, there are plenty of signs of life in Fanatics. I still have questions about the usefulness of its database. As I wrote in December 2023, Fanatics looks great on paper, but whether its strengths translate to sports betting market share is still unclear.
In its latest Sports Betting Market Monitor, Eilers & Krejcik Gaming (a newsletter sponsor) lists Fanatics and ESPN Bet’s results as mixed and Bet365 as “ascendant.” EKG tagged a fourth operator, Hard Rock, as ascendant.
Hard Rock exploded in 2024 after being granted a monopoly in the Florida market. All four increased their overall market share in H1 2024 compared to H1 2023.
This quartet is now challenging the Tier 2 operators (BetMGM and Caesars). According to EKG, BetMGM and Caesars have seen a 28% drop in Estimated US OSB GGR share. Meanwhile, the four operators in what I’ll call the “challenger” tier have doubled their GGR share.
The same shift can be seen in the app download data from the recent EKG Line newsletter, where three of the four Challenger brands are gaining share:
Beyond the Headline: Bet365 Announces New US HQ in Denver
Who says online gambling isn’t a job creator? Bet365 has selected Denver, Colorado, as the home of its new US headquarters, which is expected to create 1,000 new jobs, including 300 in the first year.
“We are thrilled to welcome bet365 and nearly 1,000 jobs to Colorado and congratulate them on the grand opening of their new U.S. headquarters here. bet365 will create nearly 1,000 new good-paying jobs and as many as 300 this year that will help Coloradans earn a good living and support their families. We are confident they will quickly find that our great state is the best place to live, work, and do business,” said Coloraod Gov. Jared Polis in a press release.
The new HQ and its desire to employ 1,000 people indicate that Bet365’s US push is just getting started.
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Quick Hitter: CT Sends Cease-and-Desist to VGW
2024 is turning into the year of the cease-and-desist order.
The latest recipient is VGW, which operates the Chumba Casino, Global Poker, and LuckyLand Slots sweepstakes sites. As reported by attorney Daniel Wallach, VGW has been ordered to leave the state of Connecticut in February.
“Sweepstakes casino behemoth VGW has been ordered to “immediately cease and desist” offering its online games by the Connecticut Dept. of Public Safety. The Feb. 9th order asserts that VGW is conducting “unlicensed online gambling” in violation of Connecticut law.”
Connecticut joins Michigan and Delaware as states that have sent cease-and-desist letters to sweepstakes operators. All three states have legalized and regulated online casinos.
Former Jaguars Empolyee Sues FanDuel
Amit Patel, the former Jacksonville Jaguars employee who stole around $20 million from the team’s virtual credit card program he oversaw to cover his gambling debts, is back in the news.
In a recently filed lawsuit, Patel claims FanDuel "actively and intentionally targeted and preyed on Plaintiff with incentives, credits, and gifts to create, nurture, expedite, and/or exacerbate his addiction with the only possible outcome that he would ultimately hit rock bottom,” per reporting from ESPN.
Patel and his lawyer, Matthew Litt, filed a civil suit in the Southern District of New York, asking for $250 million in damages.
Among the most spurious allegations reported by ESPN’s David Purdum was that “Patel's VIP host at FanDuel, Brett Krause, communicated with Patel as many as 100 times a day between 2021 and 2023, on several occasions contacting Patel on days he was not gambling to find out why. Krause acknowledged on numerous occasions that they were "breaking AML [anti-money laundering protocol]."
Dillon Borgida has been a busy man lately (it seems I’m referencing him multiple times per week), as his VIP experience and ability to decipher some recent stories have been in high demand:
The thread is a good read, with Borgida focusing on two specific claims against FanDuel:
The company didn’t verify Patel’s source of funds
It overlooked AML policies
Needless to say, this story doesn’t appear to be over.
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Around the Watercooler
Social media conversations, rumors, and gossip.
What does progress look like? Here’s an example, courtesy of an AGA tweet on the recent regulatory crackdown against offshore sportsbook Bovada.
Of course, Bovada is just one of many offshore operators. As GeoComply’s Anna Sainsbury said during the recent iDEA Growth Power Lunch Summit, there are as many as 50 major black market online gambling brands serving the US market and hundreds more lesser brands.
Stray Thoughts
Sharing this from my friends over at Poker.org, who were personally affected by Hurrican Helene:
Most of the time, The Org is packaged with a wink and a nudge, and it avoids being too much about what any one of us do or anything too serious…
Nevertheless, it would have felt disingenuous and intellectually dishonest to just pretend like nothing is wrong when (if you’re paying close attention) you know this newsletter is originating in a region where—five days after a hurricane—nearly two million homes still don’t have electricity and essential fuel, food, and shelter are limited.
So, this version of the newsletter might be a break from the norm, but it’s real. I know this because PokerOrg’s Sammie Gruber evacuated her home the day before Helene’s landfall. Paul Oresteen and Lefty both have homes and families in the path of the storm. Lee Jones has a place he won’t see for a long time because the bridge to get to it no longer exists. Me? I’m sweating whether this laptop battery will last long enough to hit send and wondering when the power will come on.
So, yeah, that’s us, but this message is not about us. We were all graced with the best of fortune. We’re going to be fine. Those dealers and floor folks who might serve you in Cherokee? Those same folks in Tampa? Or all of your poker playing friends and poker staff who hail from the southeast? Many of them could be dealing with far worse, and the region itself is now years away from recovery.
… if you’d like to help the Hurricane Helene relief effort in the southeastern US, please consider tossing a couple big blinds to any organization that is working to do some good. We’ve listed a few of the vetted ones below.
Thanks, y’all. —BW