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Winter is coming

Insight | Analysis

US states have largely avoided a second lockdown, but as restrictions tighten, could the sporting leagues once again be facing a shut-down? What then will betting operators do to mitigate a second empty sporting schedule? Cole Rush looks into what leading brands learned from the first period of Covid-19 disruption. 

Winter is coming… or if you live in the midwestern tundra like me, it’s already here. And with winter comes the tail-end of a fraught NFL season and the beginning of a delayed NHL season. 

Moving right alongside the cold front is the looming concern that novel coronavirus (Covid-19) could cause another lockdown, and another stretch without mainstream sports. 

While there’s no way to definitively predict the course of the next few months, sports betting operators can still stay at the ready and build on their learnings from the March-May period of 2020. 

In this time of rampant uncertainty, two questions emerge for sports betting operators. First, what can the industry learn from the Q1 and Q2 lockdowns? And second, how can online sportsbooks prepare for the months ahead?

The 2020 impact

This year, particularly the first half of it, hefted a lot of change onto the sports betting landscape with precious little notice. Sportsbooks had to adapt quickly to stay on the ball and provide a robust offering, even in the absence of the most popular sports. 

“It has been quite a unique year,” says Matt Kalish, co-founder and president of North America at DraftKings.

“The sports schedule disruptions resulting from Covid-19 highlighted our core competencies, such as customer insight into how to engage our audience when the usual sports content was not available to offer, and our agility to move quickly and decisively when presented with opportunities,” he says. “When sports went on hiatus, DraftKings didn’t. Innovation is core to our DNA, and we leaned into that to create fun ways for our customers to remain engaged.”

Meanwhile, PointsBet’s director of communications Patrick Eichner also emphasizes the importance of a sports betting operator’s DNA in challenging times. 

“[The first lockdown] didn’t change our operations from an overall standpoint,” he says. “Our DNA didn’t change. Compared to retail-heavy businesses, we’re fortunate because we don’t rely on physical properties.”

Still, the events of early 2020 had their impact on PointsBet. “It hit us from a sheer ‘what you’re offering’ perspective,” Eichner continues. “It impacted our marketing immediately. We had gone live just a week before in Indiana – a college basketball hotbed.

“We launched there intentionally to prepare for conference tournaments and March Madness. We had marketing levers across our live jurisdictions ready to go. When the shutdowns hit, we pulled back, limited our spend, and shifted our focus.”

That shift in outlook, Eichner says, was a rare opportunity to take a step back. “Working in sports betting […] it’s around the clock, fast-paced. Though the shutdowns were unfortunate, they did give us a chance to slow down, self-scout, and find avenues to new opportunities and better sports betting experiences for players.”

Lessons from March-May

During the spring season, DraftKings, PointsBet, and every other sportsbook operator had to quickly adjust to provide a cohesive roster of bets.

Matt Kalish highlights DraftKings’ approach to the shutdowns earlier this year. He says focus shifted to less mainstream sports, such as esports, as well as international events not halted by lockdowns, and simulated offering such as Madden NFL. 

“We conducted a national roll-out of free-to-play pools products in the DraftKings Sportsbook, which enabled customers across the US to compete and win money from a variety of events spanning politics and pop culture,” he says. 

“For example, people entered pools for the Democratic debate to guess questions like how many tweets President Trump would post during the debate, Top Chef pools that asked people to pick which contestants would advance or be eliminated, and a pool to predict how many hot dogs Joey Chestnut would eat during the annual Nathan’s contest, among many others.”

When sports started to return toward the end of May, DraftKings shifted gears to make space for returning leagues and events. “We began focusing on the relaunch of more traditional sports,” says Kalish, “Including a great sponsorship we executed for ‘The Match 2’ featuring Tiger Woods, Phil Mickelson, Tom Brady, and Peyton Manning. 

“We began to see limited rollouts of sports like NASCAR and UFC, as well as plans for the PGA Tour to resume. Our focus turned to maintaining that new engagement while preparing to relaunch content around our customers’ favorite traditional sports.”

For Eichner and PointsBet, the March-May period brought similar lessons alongside new opportunities. “We had a chance to take a deep breath and focus on our tech, product development, and new features,” he explains.

“From an offering standpoint, we looked around and asked ‘What’s still going on in the sporting world?’ Essentially, we had to pivot from a very well-known and beloved entity in March Madness into a more creative approach. Perfect example: we started offering more bets on Belarusian hockey during their playoffs.”

And it wasn’t just hockey that helped PointsBet make a splash. Other oddball sports emerged as contenders for bettor engagement. But promoting those bets required an added layer of thinking. 

“We tapped into those sports that were still ongoing, but as part of that process, we had to amp up the educational aspect even more than usual, explaining sports that don’t typically garner mass appeal. Shifting from the big four sports to Ukrainian table tennis naturally requires more education and resources for the user,” Eichner says. 

Simply put, some previously obscure events found the limelight during a tough time for the more “traditional” US sports. But the time in the spotlight for lesser-known sports and leagues bodes well for the future.

“There was a surge in interest for non-traditional sports with major sports on hiatus,” says Kalish of DraftKings. “It was clear that sports fans craved live content, so we did our best to be creative and deliver what was available during this unprecedented time. We believe many of these offerings will stay relevant and will continue to rise and increase in fan engagement over time now that many more customers have tried them.”

Future-proofing sports betting

It’s impossible to know what comes next. Until a vaccine is widely available (and even beyond that point), Covid-19 will continue to shape the sportsbook industry. Operators have already taken notice, and they’re tweaking their strategies. Now more than ever, it’s crucial to stay poised and prepared for an onslaught of change. 

One notable shift for PointsBet, as Eichner says, is a focus on trading and pricing. “PointsBet’s trading team is always on the ball, carefully tracking every last detail,” he says. “Even more so in this season, they have to react to news quickly by taking a market down, assessing the situation, and adjusting the price. 

“Particularly during Covid-19, superstar players are missing games and affecting possible outcomes. More than ever, we need to listen to the market and tweak our pricing according to the latest news.”

On a higher level, land-based casino, sportsbook, and racetrack operators are showing an increasing desire for online options. Casino closures and social distancing requirements have sparked more interest in online betting, and both DraftKings and PointsBet are noticing the uptick in partner interest.

“Covid-19 has had an impact on interest in online options, of course,” says Patrick Eichner. “But I think it’s also a sign of the times. We’re in 2020 now, very close to 2021; PointsBet launched in New Jersey in 2019, so we naturally have that digital and technology background in our DNA.

“In some cases, racetracks and casino properties can be a bit comfortable in their ways, but in recent years they’ve embraced the online angle. The move toward online solutions is inevitable, so properties are increasing their emphasis on that arena. 

“No casino or track actually wants to close down,” he continues, “but they took the time to take a breath and look at what’s working in the online space. They’re taking notice and using the opportunity to elevate their businesses.”

Matt Kalish of DraftKings recognizes the opportunity as well: “The land-based casinos we collaborate with are very supportive of mobile in general, and that was true even prior to Covid-19. In many cases, as a result of Covid restrictions, igaming or mobile sports betting offered through DraftKings might’ve been the only significant source of revenue for brick-and-mortar operations for weeks or months at a time. 

“States like New Jersey have demonstrated that mobile sports betting and igaming are additive to, not a replacement of, the brick and mortar casino business,” Kalish continues. “As we reach an audience that retail casinos often do not attract, we can help increase the business of our retail casino partners by driving awareness and trial of their resort properties through our retail sports betting presence, events, or other activations. When it is safe to do so, mobile will play a role in helping bring people back to casinos.”

These trends – new trading/pricing strategies and the push for online options, among others – are here to stay, of course. And Kalish closes with thoughts on how, exactly, sports betting companies can stay prepared for the road ahead. 

“I think future-proofing ultimately starts with a great team and a focus on the customer.  Mobile technology allows for greater innovation, even when the workforce is dispersed.  Being able to deliver experiences customers want wherever they are is a huge advantage that we believe will stand up under whichever conditions the world throws at us next.”

Those conditions are, obviously, unpredictable. And despite that uncertainty, sportsbooks are standing at the ready. If there’s one constant uniting the entire US sports betting market, it’s that change is always on its way. As we head into a foggy 2020 winter, operators are looking forward as far as they can to kick things up a notch for avid fans and new bettors alike.