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The casual play

Insight | Analysis

The US is often painted as a virgin landscape of sports fans ripe for conversion into regulator bettors, but is this really the case and can a material business be built just around the casual side of betting? Jo Christie investigates.

As the various stakeholders jostle for position across the states, a common theme has presented itself among those looking to reel in new bettors. That is that while potential American sports punters are predicted to be plentiful, they are also expected to be somewhat unsophisticated and therefore not ready for the more advanced products seen in mature markets such as the UK.

However, the idea that the US is a virgin market isn’t quite accurate, according to some. “It’s a bit more complicated than that,” says Victor Bigio, head of sportsbook at Sportech.

“I’ve spent almost 20 years on the American side of the pond and to say that the US sports betting market is a virgin market is a bit of a misnomer. By all accounts between the behind-the-bar bookies and the offshore sites tens of billions of dollars are being bet every year.”

Based on activity taking place at theScore, the second most popular sports app in North America, CEO John Levy says that in fact US-facing operators will need to cater for a wide range of bettor types, just as those in other markets do.

“There are a high number of sophisticated bettors that have to be satisfied. Then there’s casual bettors, and then there’s newbies. And I think success will come to those who address each one of those separately and pay attention to what the consumers want.”

But while this may be true, it might not actually be that easy to attract the bettors who are relatively sophisticated into the regulated market, says Bigio.

“There been a lot of talk about the fact that because the market will be regulated that this will allow clawback of people because they will feel more of a sense of trust with a local regulated operator.

“Well, if you have been playing with one of the offshore sites for years and you get your money when you ask for it, you don’t have any issues with the odds and you never have any problems with customer service, then I’m not sure that’s true.”

In any case, Jeff Gerttula, general manager at CBS Sports Digital, says the casual segment is where the biggest opportunities lie.

“At its core your more casual sports fan hasn’t had access to illegal gambling products and I think that is probably the bigger part of the market opportunity, expanding it and reaching some of that new casual audience.”

Engaging new audiences
Attracting this casual audience is about more than just getting their attention.

“You need to find a way to engage players into not just talking about the game itself, but taking it this extra layer by adding betting vernacular into the conversation. I think this is the first step. It has to become second nature to discuss the odds in the same way it is in the UK and Europe,” says Bigio.

Many US sports fans will be unfamiliar with the betting terminology and also the mathematics behind betting terms that would be easily understood in Europe. There is therefore an education process that needs to take place alongside attempts to reach new potential bettors. 

One strategy for educating players that’s made a resurgence recently is predictions games and free-to-play games in states where sports betting legislation is not yet in place. The thinking is that by the time it’s available, players will be knowledgeable enough to slip easily into real-money betting. 

“It certainly is a logical evolution in terms of the experience for the fan,” says Scott Kaufman-Ross, head of fantasy and gaming at the National Basketball Association (NBA).

Even in California, where the prospect of legal sports betting looks a long way off, teams see value in such an approach. The Sacramento Kings, for example, recently launched a predictive gaming lounge in-stadium.

And, of course, FanDuel and DraftKings have been getting players used to the idea of betting on sport for some time–and also proving its value to the leagues.

“We’ve seen plenty of data that shows that fans who play fantasy sports engage more than fans who don’t,” says Kaufman-Ross. “They potentially are interested in games that maybe they otherwise wouldn’t be interested in and they watch the game for a longer period of time because they are interested in more than just who wins and who loses.”

For this reason, Gerttula expects the conversion of players from daily fantasy sports to sports betting to be high.

“Every single one of them,” he replies, when asked how many will cross over. “It’s basically the closest alternative to sports betting available in the US that you can do legally.”

Positioned for success
With this kind of thinking widespread, it’s no surprise that the DFS companies have taken the early lead in regulated markets such as New Jersey. But there’s been a lot of debate about whether or not they will retain that lead once more land-based operators and overseas operators throw their hat into the ring.

There’s also competition from media players, with theScore having announced in December that it plans to enter the New Jersey sports betting market around the middle of this year via a partnership with Monmouth Park Racetrack.

“Getting into sports betting is not really even a pivot for us, it is just a natural extension of what we do,” says Levy. “We have this big user base from North America, with a high percentage of them, over 65-70%, in the US. We know at least 50% of them bet on sports; we know that from our own surveying and from third-party surveying.”

What’s perhaps particularly noteworthy about theScore’s insight is its experience of adding a chat feature to its app five months ago.

“What’s really interesting is that 50% of the conversations are about sports betting,” says Levy. “Conversations like ‘who do you like tonight?’; what’s the spread in the game?’; ‘how much is this game going to win by?’”

This suggests perhaps that US sports bettors might not be quite as unfamiliar with the betting vernacular as some believe. 

Nonetheless, conventional wisdom is that the US market, at least initially, will be similar to an earlier version of European markets. 

“I would say that the majority of early betting would more likely be the more standard straight bet, parlay-type betting that people are used to and the in-play market, which definitely is far more advanced in the UK and Europe than it is America, might need to be a little simplified.

“I think that easing the US market into some of the features of betting that are more mature in the European market is a good idea but I feel like they are going to be quick studies,” says Bigio.

When it comes to in-play, however, Kaufman-Ross says the market has already developed quickly. “In New Jersey we’ve been told by FanDuel that in-play betting is already over 50% of the total volume bet on NBA.”

Bigio points out that operators need to remember there’s a significant number of players who will remain casual and that no amount of education will change that.

“If you use the NHL’s deal with MGM, for example, embedding chips in the players’ helmets and their sticks to determine what will be the fastest shot of the game and who will skate the fastest speed or travel the furthest distance, those types of things are really aimed at casual bettors. It’s similar to the success of Super Bowl pools or March Madness, where casual bettors bet because they like the color of their uniform or the people in their office are involved in a pool. 

“People will say it is a gateway to betting on real components or real outcomes of the game. I don’t necessarily believe that, but I do believe you can build a very healthy business around the casual side of betting.”

A healthy business is obviously what everyone is aiming for in the US–whether or not it is achievable given regulatory restrictions and intense competition remains to be seen.