Step Aside Butch
Fanatics is pushing its way into a podium position in the US sports betting market. Missouri sports betting ballot initiative could be headed for a recount.
The Bulletin Board
VIEWS: Fanatics is steadily increasing its sports betting market share.
LEGAL and REGULATORY UPDATES: Arkansas casino lawsuit; Missouri OSB licensing process.
QUICK HITTER: Ohio lawmaker wants to reset sports betting tax rate to 10%.
VIEWS: Is Missouri’s sports betting ballot initiative heading toward a recount?
AROUND the WATERCOOLER: Celebrity endorsers don’t (always) work.
STRAY THOUGHTS: Two quotes for cannibalization critics and deniers.
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Is Fanatics Ready To Make Its Move?
Fanatics, one of STTPs’ four “Challenger” brands, is suddenly getting a lot more attention as the company has steadily increased its market share throughout 2024.
“Early October data reports show that Fanatics is making a strong play for podium positions in its US online sports betting state markets,” Vixio’s (a newsletter sponsor) Daniel Stone tweeted. “Fanatics captured third place in the massive New York OSB market and settled marginally behind 3rd-placed BetMGM in Maryland during October.”
As Casino Reports recently wrote (drawing on data from analyst Alfonso Straffon), Fanatics now possesses a 6.8% handle market share in the 20 mobile betting states where data is broken out by operator. That is still far behind FanDuel (35.6%) and DraftKings (39.4%), but Fanatics is trending up and could emerge as the Bronze medal sportsbook in the coming months.
Last month, I noted that Fanatics had shot to the #3 spot in New York and “is also gaining steam in Massachusetts, where it ranks fourth behind DraftKings and FanDuel and is nipping on the heels of BetMGM for third place.” In May, Fanatics was dead last in the Massachusetts market.
I looked at Fanatics strengths and weaknesses in a December 2023 column, where I noted:
“Fanatics is using a really good but not top-rated sports betting platform… With that in mind, differentiation has to come from elsewhere, and Fanatics believes that elsewhere is its database of sports fans – sports fans willing to pay $100-plus for an authentic jersey and team-licensed gear… The company possesses a massive and active database and can experiment with unique ways of engaging with its existing customers that, quite frankly, other sportsbooks can’t.”
Fanatics’ experiments included a much improved app (#3 in newsletter sponsor Eilers & Krejcik Gaming’s H2 2024 Rankings) and engaging with VIP customers. The company has heavily invested in its VIP department and hiring of former Gucci senior vice president of brand and client engagement Selena Kalvaria as its new CMO.
As the Wall Street Journal put it, Fanatics “wants to be known as the betting app for true sports fans,” which, based on the evidence, is a euphemism for VIP bettors.
Legal and Regulatory Updates: Arkansas Casino; Missouri OSB Licensing Process
Judge denies temporary restraining order Arkansas casino case: As previously noted, Cherokee Nation Entertainment filed a federal lawsuit after Arkansas voters revoked their Pope County casino license on November 5. The tribe claims the 5th and 14th Amendments of the US Constitution prohibit the government from taking property without due process and that the ballot referendum violates the U.S. Constitution's Contract Clause. US District Court judge denied the tribe’s request for a temporary restraining order, but the case is still active.
Missouri regulator hints at strict licensing process: Based on comments by Missouri’s top gambling regulator, everyone even loosely associated with mobile sports betting will need to be licensed. “With casino gambling, if someone is going to be working in a casino, they have to be licensed by the Missouri Gaming Commission as well,” Jan Zimmerman, chair of the Missouri Gaming Commission, said. ”So this application process really won’t be significantly different. There are lots of folks who will be affiliated and associated with sports betting that will need to be licensed." STTP UPDATE: The ballot initiative could be headed for a recount (more on that below).
Latest STTP reporting on Missouri’s passage of sports betting
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Quick Hitter: Ohio Lawmaker Wants to Reset OSB Tax Rate
The outgoing Ohio Senator who introduced an online casino bill has restarted a push for a bill he introduced in November 2023 that would reset the state’s sports betting tax rate to 10% after it was doubled to 20% just months after the industry launched in 2023.
The legislation was introduced by State Sen. Niraj Antani, who authored the state’s sports betting bill in 2022 and introduced the online casino bill, SB 312, in September.
Importantly, Antani is leaving office at the end of the year after deciding not to run for reelection.
“The 20% rate makes us the 6th highest out of the 38 states with sports betting. The lowest in the country are Iowa and Nevada, three times lower than our rate,” Antani wrote in support of his 2023 bill to the Senate Finance Committee last week. “Our border states, Kentucky, Michigan, Indiana, and West Virginia, now all have significantly lower tax rates. This puts us at a significant regional and national disadvantage.”
Missouri Sports Betting Heading for a Recount?
Christian County, Missouri, has a message to everyone celebrating the state’s legalization of sports betting, and that message is: Not so fast.
A late batch of votes from Christian County has shrunk the margin of victory from a few thousand to just a few hundred, which is well within the margin for a recount.
“The official results from Christian County, certified last week, increased the county’s vote total on Amendment 2 by 9,653, with a margin of 3,995 votes against sports betting among the additional ballots. Added to the statewide tally maintained by the Secretary of State’s office, just that change would shrink the statewide margin from a 4,363-vote majority on Election Day to a mere 368 votes as of Monday out of nearly 3 million votes cast.”
There is also some good news, as other ballots that have trickled in from across the state have favored the “yes” vote, increasing the margin to 720 votes per the Independent, which at .03% is still well below the recount threshold.
Missouri law allows a recount if the margin is less than .5%. But, according to JoDonn Chaney, spokesman for Secretary of State Jay Aschcroft, a recount must be requested by someone with a direct interest in the outcome — similar to standing in a lawsuit.
Not everyone agrees with the Secretary of State, and the initiative may be heading to court before a recount to see who is correct — assuming there is a challenge.
Per the Independent, Wes Shoemyer, a former state lawmaker, previously requested a recount on the Right to Farm amendment “based on his status as a voter who opposed the measure, not his position with the opposition campaign.”
“The voter has more rights than the treasurer,” Shoemyer said. “Anybody who wants to come out and say they voted no can ask for it.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
I’ve been saying what Craig Carton said on X for a while: The use of celebrity endorsements is often out of touch with how people view and indirectly engage with celebrities.
As I wrote in the show notes of my podcast with Steven Salz, where this topic dominated the second half of the discussion, “The conversation takes a very interesting turn when we shift to marketing and the difference between authentic celebrity marketing and paid spokespeople, which is definitely worth sticking around for.”
or, as I wrote in January:
“Definitely outside of my area of expertise, but I often wonder how effective these celebrity endorser campaigns are. A big name certainly brings people to theatres and sports events, but that doesn’t feel like an apples-to-apples comparison as people are there to see them do what they do best, not pitch a product they have little connection to - this isn’t Michael Jordan with sneakers.
“If the ad is good, does it matter who delivers the message? If the names are huge (like they are here), does the star power overshadow the message - “Did you see the new Brady ad,” rather than, “Did you see the new BetMGM ad?””
Stray Thoughts
Two quotes related to the cannibalization demand shift debate:
“The only human institution which rejects progress is the cemetery” ~ Harold Wilson Nearing
"When the facts change, I change my mind. What do you do, sir?" ~ John Maynard Keynes
As I wrote in my September column on the topic:
“I have long pushed back against cannibalization concerns as I found them hyperbolic and lacking context. That said, I have never dismissed them out of hand. My contention was (and continues to be) that cannibalization exists. Still, it is more than offset by what online gambling brings to the table, and trying to delay the inevitable is a recipe for disaster.”