Ready For Primetime?

Prime Sports is prepping for its US debut, but can the consumer-friendly model its offering breakthrough and capture market share in the highly competitive US sports betting market?

Sep 06, 2023

NEWS: Can Prime Sports make inroads in a crowded US market?
BEYOND the HEADLINE: Prime isn’t the only company taking a different approach, but thus far, US bettors have shown a preference for the staples.
NEWS: Bet365 doesn’t need to differentiate. It can compete on the same playing field as FanDuel and DraftKings.
NEWS: Is North Carolina ready for online gambling? One key lawmaker thinks so and took his case to the public via an op-ed.
VIEWS: There is a lack of funding for problem gambling services, but is more funding the answer to the problem?
AROUND the WATERCOOLER: Sticky customers and high tax vs. low tax states.
STRAY THOUGHTS: Intelligence vs. Wisdom.

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You Can Get With This, or You Can Get With That

Prime Sports is a project I’m paying particularly close attention to - you may remember Prime from a previous newsletter. First, it’s putting the “bettors are price-sensitive” argument to the test. Second, I’ve known Joe Brennan for many years and am rooting for Prime Sports to succeed.

Earnings+More summed up the company’s strategy quite nicely on Tuesday, saying, “The company is taking the route previously trodden by Circa, Pinnacle, and others of attempting to cater for consumers that want more from their betting experience, including better odds.”

Prime has been approved for launch in Ohio and New Jersey and expects to be approved in Kentucky by the end of the year. However, it will not be live for Week 1 of the NFL season. That news was revealed on Eilers & Krejcik Gaming’s new podcast, Zero Latency, by Prime Sports executive president Joe Brennan.

On the overall approach, Brennan told Zero Latency hosts Bradley Allen and Alun Bowden, “Sports betting is a volume play and not a margin play,” explaining it thusly:

“You guys know I hang out on betting Twitter, and there’s been a raging debate for about a century on there on the sharp sportsbook model vs. the recreational sportsbook model, and really, it’s a misnomer. We’re not looking to only book to sharps… we’re willing to take a bet from anybody. We don’t discriminate. A dollar bet from Billy Walters is the same as a dollar bet from Alun and Brad.”

Beyond the Headline: The Same But Different

Prime isn’t the only company attempting to disrupt the status quo, which, if we are being honest, is the same product with varying levels of sophistication in several key areas.

The closest thing we have to something different is Betr, which isn’t exactly lighting the US sports betting world on fire at this point. Even the short-lived marriage between Penn and Barstool produced a typical sportsbook.

I fall into the camp that there is room for differentiated products, with the huge caveat that these products aren’t as known (understood) as traditional wagers.

An interesting angle and reasonable expectations could have some success. Still, I’m not sure there is something new under the sun that people will gravitate toward.

And many of the products people are touting as the next big thing are just new spins on old ideas. In-play betting is popular, but go rewatch Enter the Dragon, and you’ll see that in-play betting was already a known commodity in the 1970s, and I’d wager it dates back millennia.

Yes, technology allows us to do more, but the popular way of betting is popular and has been the SOP for centuries for a reason. Again, there is room for something new, but the notion that something will supplant traditional bets seems a bit far-fetched.

Bullish on 365

I’ve been talking quite a bit about Bet365’s increased focus on the US market, but I rarely give any specifics for my optimistic appraisal of its US venture.

But as Eilers & Krejcik recently noted, 365 is now closing in on licenses in eight states:

Trending up: bet365 U.S. footprint. Bet365 secured a sports betting license for AZ on Tuesday, potentially marking a seventh state for the operator. 365 is also set to launch in KY next month, adding to OH, VA, NJ, IA, and CO.

Its success in Ohio, where it’s competing for third place with betMGM, along with its well-received app, cannot go overlooked. Essentially, unlike Prime Sports, which is looking to differentiate, Bet365’s strategy is to beat FanDuel and DraftKings at their own game.

Prior to Ohio, 365 was little more than a lurker in the US. It was active in some states, but like an after-hours club, it never promoted its existence. That appears to be changing - although I would point out the company is, at least for now, avoiding high-burden states like New York (tax rate) and Massachusetts (taxes and regulatory burdens).

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NC Lawmaker Makes the Case For Online Gambling

North Carolina Rep. Jason Saine made a very persuasive case for online gambling in the Tarheel State. In an op-ed for the Charlotte Observer, Saine called iGaming, “the industry’s future,” and likened land-based expansion without online to building movie theaters but not providing streaming options.

“iGaming is the next evolution of digital entertainment and works in tandem with online sports betting to offer an immersive and interactive gaming experience,” Saine wrote, emphasizing three core benefits of legal online gambling, “maximizes tax revenue now and into the future, regulate and make safe a thriving illegal market [$430 million in North Carolina per the American Gaming Association], and complement traditional brick-and-mortar casinos.”

Saine touches on revenue potential but rightly (in my opinion) focuses on consumer protections and how online casino and poker players deserve the same protections as sports bettors:

“As lawmakers, we each take an oath to work to protect our fellow citizens. Stamping out a thriving black market and offering consumers a safe, well-regulated way to entertain themselves should be a no-brainer.
“Anybody with a smartphone – at any age – can visit a foreign website and place bets on digital table games like poker or blackjack, digital slot machines, and the like. These foreign providers are entirely unregulated. Their trade practices are a free-for-all, and scams and identity theft are all too common.”

To put it bluntly, any state that hasn’t legalized online casinos and online poker is not stopping its residents from participating in those activities. It’s merely stopping them from playing on regulated sites.

Mo Money Mo Problems

How much money are states spending on problem gambling? According to a recent AP article citing Oregon-based consulting firm Problem Gambling Solutions Inc., “states spent an average of 38 cents per capita on problem gambling services in the 2022 fiscal year.” Nine states spent zero on problem gambling services, according to the firm.

The National Council on Problem Gambling’s (NCPG) executive director Keith Whyte called the amounts “token” in many places, adding, “The funding is starting to flow, but the amount is still clearly inadequate in most states.”

Zero dollars is completely unacceptable, but I’m not sure we are going to spend our way into a solution. Massachusetts spent more than $10 million on problem gambling services in 2022 (which is more than $1 per resident), and I’d be curious to see how its PG rates compare to other states, both pre and post-legal betting.

As Jamie Salsburg put it on X, spending more money on the same message may not be the most prudent use of funds, especially if funds are in short supply:

This is a topic I will delve into in an upcoming Friday feature article.

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Around the Watercooler

Social media conversations, rumors, and gossip.

More discussions on that Fanatics jersey promotion from Gambling Twitter and how sticky the customers who take advantage of it will be:

Another important point to monitor going forward is the high tax rate vs. low tax rate discussions. Yes, low tax rates create a stronger industry, but high tax rates are clearly a win for the state.

Stray Thoughts

Gambling is a complex industry. I’ve been involved in the industry in some capacity for roughly 25 years and continue to learn and have long-held ideas challenged. The good news is that after 25 years, I’m able to quickly adjust to new information and understand how a new product or policy fits into the overall landscape.

I’m far from the most intelligent person in the space, but I have wisdom. Wisdom allows me to ask the right questions and challenge assertions.

Intelligence, as defined by the Cambridge Dictionary: the ability to learn, understand, and make judgments or have opinions that are based on reason.
Wisdom, as defined by the Cambridge Dictionary: the ability to use your knowledge and experience to make good decisions and judgments.

Intelligence is critical when it comes to problem-solving. Wisdom gives us the ability to make good judgments.

In the crazy world of gambling, smart people come up with solutions to a problem; wise people explain why those solutions are unlikely to work.