With more states legalizing sports gambling, Super Bowl LVII will likely be the industry’s biggest event ever. The American Gaming Association is predicting that over 50 million people will bet around $16 billion on the National Football League championship game between the Kansas City Chiefs and Philadelphia Eagles.
But how do online/mobile casino and sports betting companies stand out in an increasingly crowded field?
Gambling leaders such as DraftKings, Flutter Entertainment (PDYPF), owner of FanDuel, MGM, Caesars and Wynn (WYNN) are all looking for customers.
High stakes competition is taking a toll on the sports betting giants’ stocks. They’ve all been up so far this year as the broader market has recovered. But many of these stocks are just recovering from previous sharp losses.
DraftKings is down about 30% in the last 12 months and nearly 75% in the last two years. Caesars (CZR) and Penn Entertainment (PENN), which owns Barstool Sports, were down 40% from the previous year. Rush Street Interactive, parent company of BetRivers, is down nearly 65% during the same period.
Each of these companies spends a good amount of money on flashy advertising campaigns. It’s impossible to miss Jamie Foxx in MGM ads, Kevin Hart pitching DraftKings, and JB Smoove and the Manning family pitching Caesars during commercial breaks at NFL games. Companies are also spending a lot of money on promotional efforts such as “free bets”.
Sports betting companies will have to make every effort to gain new customers and restore some confidence among investors.
MGM may have an advantage over the competition. The company’s BetMGM unit, a 50-50 joint venture between the Las Vegas casino giant and Entain, a UK-based gaming company, has the only brick-and-mortar bookmaker on the Super Bowl. It opened last September in Phoenix and is located outside State Farm Stadium, where the game will be played on Sunday.
Of course, many players will be busy placing bets on their phones. But Adam Greenblatt, CEO of BetMGM, told CNN that business in pre-match and in-match sports betting should be brisk.
“We prepare for this Super Bowl like never before,” said Greenblatt. “We are hiring to meet the high demand.”
Greenblatt said the 17,000-square-foot sportsbook near State Farm has a giant video wall, as well as 38 HD TVs so bettors can watch the Super Bowl. There are also 25 betting kiosks. The goal, after all, is to get people to bet on the game.
Given the competition with DraftKings and FanDuel, as well as other casino companies, Greenblatt said having a physical location at the Super Bowl must be a huge marketing opportunity. A big target for Sunday is also convincing people who place bets on sports betting to download the BetMGM app so they can set up accounts.
Marketing is important, Greenblatt added, because MGM can remind players that it’s a legacy casino brand, not a newcomer like DraftKings, FanDuel or Barstool.
“We are fun and sophisticated. Eleven from the ocean. That was an MGM experience,” he said, referring to the fact that the MGM Grand on the Las Vegas Strip was featured in the 2001 remake of the 1960 heist film. “We want to be aspirational, but also approachable.”
Industry newbies are not too concerned about casino operators.
FanDuel CEO Amy Howe said in an interview with CNN that there is plenty of room for more growth, especially after Ohio, Maryland and Kansas legalized sports betting last year.
“This has to be the biggest day in FanDuel history,” Howe said, adding that the company expects around 17 million bets on the game. That’s more than double the number of bets on the Super Bowl last year.
Howe said FanDuel is also predicting it could end up with around half a million new customers who place bets on the game, including more women.
Still, DraftKings CEO Jason Robins told CNN that he thinks sports betting companies realize they can no longer overdo expensive promotions.
“At the very least, the competition is now less intense than it was last year,” said Robins. “Last year was the pinnacle. It was rather irrational.”
It’s no longer smart to chase market share at all costs… and Wall Street has punished companies that have done so in the past, including DraftKings.
“Investor tolerance for the types of undisciplined spending during the NFL season last year has waned,” said Robins. “Investors want to see a path to profitability. This is different from 2021 when customer growth was paying off.”
That said, DraftKings and FanDuel still plan on announcing during this year’s Super Bowl. DraftKings will have another announcement with Hart, while FanDuel has recruited former NFL player Rob Gronkowski, who was not a kicker, to try to make a “kick of fate” field goal on live TV. Howe said the ad will air during the third quarter.