I emerged from the sports betting desert long enough to place my first legal bets outside of Nevada or New Jersey recently. Disappointed to report that I posted a perfect record — as in winless.
If I’m not better at covering sports betting than I am at sports betting, we’re all wasting our time here.
When PASPA fell, many in the sports industry envisioned fans betting from a single screen — the ultimate “gamification” meant to attract a younger demo that doesn’t watch as much sports as its predecessors.
It hasn’t turned out that way. Betting skews young and male, to be sure. But it remains a second-screen experience. Asked whether that’s likely to change any time soon at this week’s SBJ Media Innovators conference, execs from both the sportsbook and media sides were skeptical.
The sportsbook that came closest to offering on-screen betting, Fubo, went belly-up in October. Consumers in the three states in which it rolled out never saw it as enough of a differentiator to attract them to Fubo’s TV service, at least not at a sufficient rate to justify the expense of rolling out a sportsbook.
“If you asked me two years ago, that was the holy grail,” said Mitesh Mehta, SVP/sports betting and gaming for NBC. “Open up your [Xfinity] X1 device or Spectrum or whatever, you press a few buttons and you can place a bet right there. That’s hard. People are so used to operating on their device. The second-screen experience is how you watch sports. … So having a mobile device and watching is not, in my opinion, that complicated. It’s a very normal habit now. So … do we want to go on a single-screen operating device? Truth be told, I’m not sure if that’s the right path to go.
“We saw with our friends at Fubo, they are walking back what they were doing and one of their primary opportunities was a single-screen experience, placing bets within an environment. I just find the actual action of it [to be] hard.”
NBC's Mehta (middle) isn't sure a single-screen experience is desired any longer
Chad Millman, chief content officer at Action Network, used his own betting experience to explain the hurdles — and how the tech it would take to clear them now seems like a distant dream. “It’s very Jetsons to be thinking: ‘All right, we’re going to be able to make the bet right now,’” Millman said. “Years ago, people thought that was going to be the [user experience].
“We have legal betting in Connecticut. If I want to bet live on a game, I’ve got my phone up, I’m in the Action app, I’m seeing where the best line is for the operators in my state. I’m immediately going to that book. It’s a 30-second experience or less. A lot of times, you don’t even have that much time to make a bet.”
All of these are hurdles: integrating a state-regulated sportsbook platform into a TV platform, making it work when game broadcasts are delayed by seconds and moving through the expansive live betting menus of the leading sportsbooks.
“Trying to make hundreds of decisions and navigate using a remote control just doesn’t seem like it’s the future,” BetMGM CRO Matt Prevost said.
Putting streams of game telecasts in the betting app would be the more likely tech fit, but the cost of rights fees makes that untenable for all but the fringiest sports. Even FanDuel, which does the most in-app event streaming of any of the sportsbooks, concedes that it’s not the right home for the mainstream properties.
Action Network's Millman feels the tech hurdles for a one-screen experience are too many
ESPN still has no “imminent” plans to license its brand for a sportsbook, but the company continues to see the value in sports betting. That was a key takeaway from ESPN President Jimmy Pitaro’s Q&A with SBJ’s Abe Madkour to open this week’s Media Innovators conference.
The betting relationships for ESPN to date have been kept strictly editorial, coming in the form of podcasts, TV programming (whether dedicated studio shows or BetCast-style simulcasts) or written pieces on ESPN digital platforms. The collaboration they have had with DraftKings and Caesars has been in the form of “link out” pacts. The Caesars deal also included a dedicated studio on the Strip in Las Vegas.
“We’ve done research, and our fans like what we’re doing,” Pitaro said. “They also would like more from ESPN. It’s a very attractive audience; higher net worth audience. These are folks who spend a lot of time with sports, consuming games, especially on ESPN. So if you look at the research, it really tells us we can be doing more here.”
But there has been chatter for a while now that Disney could create a lucrative line item by licensing the ESPN name to a sportsbook. “We’ve had conversations with all of the usual suspects, looking at what could be the logical next step for us, said Pitaro. “We are not going to, and I’ve said this repeatedly, we are not going to create a book. We’re not going to take people’s money. We are not going to set lines and spreads and odds. It’s not what we do. But the idea of leaning in a bit more here, creating a more seamless experience, is something that’s definitely on the table.”
Pitaro also noted it’s a decision that will need to be done in concert with his new (and old) boss, Bob Iger. “Bob’s ultimately going to have to dig in with me. We’re going to have to sit down and I’m going to have to walk him through this. He doesn’t just look through the ESPN lens, he looks through, of course, the Walt Disney Company lens. We believe that there is upside for the ESPN business. We believe that there’s upside for the ESPN brand.”
The stall we’ve seen in sportsbooks sponsoring college athletic programs, even as the footprint of legalized states has grown to include 29 Power Five schools — including 11 of 14 in the Big Ten — is due largely to the reluctance of many schools to dive in, some murkiness around who controls which rights, and the uncertainty of how the sale of official data to sportsbooks fits into the equation.
But there’s also a lack of appetite among some sportsbooks to see their brands on college campuses. Thus far, none of the three leading operators — FanDuel, DraftKings and BetMGM — have cut a sponsorship deal with a college athletic department or conference.
Caesars has LSU and Michigan State. PointsBet has Colorado and Maryland. Among the major programs, those are the only deals — and all were consummated by the end of the last academic year.
Prevost said BetMGM intends to continue to steer clear of college sponsorships. “Direct involvement of our industry with universities is a no-fly zone for us as a brand,” he said. “We just don’t think seeing our brand presented on a perimeter board in a college basketball game, where a quarter of the fans are underage, is a good look for the brand. I know others have ventured in that space. We will stay off of that.
“Look, we’ve seen the movie in the U.K. If you go too far there, there’s a natural backlash and we want to be as responsible … as we possibly can.”
PointsBet’s decision to become the first U.S. sportsbook to integrate the PGA Tour’s full menu of in-play bets into its app through an expansion of its deal with data distributor IMG Arena could be a game-changer for all three of them.
Using real-time data delivered through Arena’s Golf Event Center, PointsBet will offer a range of bets including score on the next hole, number of putts on the next hole, distance of the longest drive and closest to the pin, all for every player on the course. The app also will enable users to follow each shot through a live animation and provide live video from two holes at each Tour event. Users also get access to historic shot-by-shot data and stats for each player.
For PointsBet, it’s a chance to differentiate its app from competitors with larger ad budgets, establishing itself as the preferred choice of golf bettors, a segment likely to continue to grow as live betting options increase. For the PGA Tour and IMG Arena, it’s a first chance to deliver proof of concept on a complex data product that took three years to build but until now has seen little adoption by the sportsbooks.
PointsBet, which had a modest live golf offering last year, expects to multiply the number of bets it offers by 5x in 2023. For the biggest events, it could offer as many as 35,000 “markets” — or opportunities to place a bet — over the course of four rounds. The core will be the chance to bet on whether a player will go birdie, bogie or par on an upcoming hole, with the ability to track shots live as they unfold.
“It’s been a lot of development on our side, but it’s also a bit of a development lift for the operators to integrate this product and make it work on their platforms,” said Norb Gambuzza, SVP/media and gaming for the Tour. “We’re engaged with all of them and PointsBet is the first [to take the full product]. I’m excited that we’re up. We’ve been waiting for that moment in time when the market is going to see the full capability of this shot-by-shot level product.”
PointsBet was one of a handful of Tour-approved operators that offered a small sampling of live betting on its events last year. It is the only one that has taken the plunge to offer the full menu thus far.
The sportsbook said it saw golf handle increase 23% and live golf handle increase 25% last year. A year ago, golf handle didn’t rank in PointsBet’s top 10 compared to other sports. It has grown steadily, now approaching the top five. About 60% of PointsBet’s golf handle comes through in-play.
While solidly positioned among the top seven U.S. sportsbooks, PointsBet sits far behind the top three in domestic handle, clocking in at around 5%. Of late, it has pulled back on broader national marketing and promotions to focus on central premise: That it delivers the best live betting experience of any U.S. app, offering the deepest menu of bets and keeping them “open” for the longest time. The sportsbook has gone so far as to create a tag for its in-play offerings, which it markets as “lightning bets.”
Both PointsBet and the PGA Tour think golf is the ideal vehicle to show off that ability. “If we’re going to do this, we want to do it right,” said Eric Foote, chief strategy officer for PointsBet USA. “We’re putting our money behind our megaphone that we want to be the leader in in-play betting with our lightning bet. That’s something that stands out for us. We want to be known for that.”
Almost all the expense of the expansion came in the form of software development and integration, which it and IMG Arena handled in-house, beginning the project late in the summer. PointsBet’s payment to IMG Arena is through a revenue share. “Handle will increase exponentially and easily cover any expense that we incur,” Foote said. “The type of customer we get through golf loves to wager in general. But you have the best data, the best tech and the best product. That’s what it takes in order to own golf. So we’re going to continue to double down there.”
With a handful of large states still outstanding, handle for October continues to track slightly behind the same month last year in states that were open at the time. That doesn’t include New York, Louisiana or Kansas, which all have opened in 2022.
October was better than September by 23% in the states that have reported.
With all that said, the addition of those three states in 2022 has the month tracking to exceed $9 billion in handle once all have reported.
NOTES: Illinois, Arizona, Virginia, Colorado and Wyoming regulators have not yet reported October results.
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