Four pillars for betting success

Since the first online sports betting operation post-PASPA went live in New Jersey back in August 2018, we have seen a wide range of products and brands launch in varying capacities.

A key takeaway from the last 12 months, and the initial launches we’ve seen, is that not one business had everything ready to go from day one to be a standalone success in the US.

All US sports betting and igaming operators require four pillars to ensure that they are set up to give themselves the best chance of success in the ultracompetitive US gambling market.

As these pillars are wide-reaching, we have seen a number of strategic partnerships and joint ventures of varying structures in pursuit of long-term success.

Since no business from the US or Europe pre-PASPA had all of the required elements in place, it is only via collaboration and pooling of resources that businesses are able to get in a position where they have adequate coverage across each of the pillars to be able to enter the market.

Brand and reach

The US is unlike any other market in the world. The American player has a huge affinity to incumbent brands, and this is something that will continue to be the case, especially during the infancy of the market. We have seen the importance of brand in New Jersey with the huge early successes of FanDuel and DraftKings.

The reach and distribution capability of the brand is extremely important and something that has been highlighted by the launch of Fox Bet and theScore. We have also seen JVs which give access to deep databases, such as MGM and GVC.

Product and experience

From a product perspective, there needs to be an amalgamation of the robust technology that has been developed in regulated Europeans markets, as well as integration of US sports experience. The sophisticated automation and deep feature sets that the European bettors have come to expect as standard are a long way away from the traditional products that patrons of Las Vegas sportsbooks are used to.

To ensure long-term success, operators need to strike the right balance of ensuring that the products being offered to US-based users are as feature rich as European products, but also ensure that they include all of the key features specific to the US.

Within the product pillar, we also have the very important topic of experience. Organizations need to ensure that they have adequate American sports knowledge within their organizations to be able to manage the betting flow of the US player and ensure that all communication with the US audience is done in the right tone.

Market access

Unique to sports betting in the US is the requirement, in the majority of states, for online brands to partner with a land-based casino for access to a license. There have been a number of partnerships and JVs made by land-based operators in varying capacities ranging from cash for access, equity, or a hybrid of the two. Deciding on certainty via a larger partnership or attempting to patch work access state by state is a multi-layered decision.

Financing

The US is a market where you need to pay to play. It is certainly not a cheap territory to operate in and you can expect to pay top dollar whether that is for talent, market access, branding, player acquisition, data, technology, etc.

In sum, whether you are in the market, or looking to enter the US, you better be sure to have a war chest on hand and a very strong balance sheet to sustain your investment over the next three to five years.

Sean Hurley – Independent consultant

Sean Hurley is an independent advisor and consultant to some of the biggest and most successful digital B2C gaming operators, land-based casinos, affiliate networks, media entities, B2B technology suppliers, rights holders and investment institutions. He specializes in platform/ technology evaluation and selection, data and feed supplier selection and commercial discussions with all vendors and third parties.