The month in US sports betting: bet365 stirs as NJ market share rises
Eilers & Krejcik considers whether DraftKings will lose its Caesars market access post Eldorado deal
After the US sports betting market in June generated just $29.3m in revenue, July looks, well, a lot better. Using July results from the key online sports betting markets of Indiana, Pennsylvania, and New Jersey – we estimate that total US revenue in July will come in around $73m (+149% MOM).
After July’s month over month recovery – which was largely driven by the resumption of MLB and NBA, as well as ongoing PGA, UFC, and NASCAR events – we look for an even fuller recovery in revenue in the August period, which will benefit from a full month’s worth of MLB, NBA, and NHL competition.
DraftKings Q2 2020 results: Two big questions that went unanswered
- How did the company’s B2C business segments perform? Management, as they did in Q1 2020, provided no data on the company’s online sports betting and online casino segments, with revenue and player metrics only given for the combined daily fantasy sports, sports and casino business.
We were guided towards declining CACs and ‘pent-up’ demand for sports betting, with much talk of record betting days on MLB, NBA, and pretty much every other betting market available. But guidance on segment-specific player acquisition, active players, CPAs, ARPUs – let alone any insight at all into the B2C business operations – would have been most welcome.
- What becomes of DraftKings’ market access through Caesars given the newly merged Caesars-Eldorado entity’s partnership with William Hill? In a worst-case scenario, DraftKings could lose access via Caesars to Kentucky (where Caesars has a racetrack), Louisiana (where Caesars has a casino), and Maryland (ditto), which together account for 5% of the US adult population. Maryland – a populous, relatively wealthy state where market access slots will very likely be tightly limited – would be the most significant loss here, in our view.
The sleeping giant stirs
We’re seeing signs that global online sports betting behemoth bet365 may finally be putting its foot on the gas pedal in New Jersey. In June, its share of the Garden State online sports betting market (in GGR terms) hit an all-time high of 2.6% (versus 0.3% in the 12- month period ended June 30, 2020), per our proprietary tracking.
The share increase was accompanied by the recent launch of televised adverts in New Jersey and the debut of signage at Yankee Stadium in New York. We also note that Google search interest in bet365 is trending up in New Jersey.
Source: Eilers and Krejcik Gaming/ Google Trends
Media monopoly in the making?
On its recent H1 2020 earnings conference call, William Hill management touted its tie-up with CBS Sports, which launched in late July. As part of that deal, William Hill is providing odds across all CBS Sports properties – including CBSsports.com, which averaged an impressive 40.9 million US visits per month between February and July, per data from Similarweb.
Whether William Hill will gain access to Caesars’ integration with ESPN – arguably the top sports media property in the US – remains one of many open questions that have arisen after Eldorado (which has a sports betting partnership with William Hill) completed its merger with Caesars last month.
Should William Hill be integrated into the ESPN universe, the number of US eyeballs on William Hill – and potentially awareness of the William Hill brand – could meaningfully increase, giving William Hill a boost at a time when many of its rivals are going double-barrel on marketing spend in pursuit of share.
Of note, ESPN.com averaged an eye watering 256.3 million US visits per month in the February-July period, making it the largest US sports website by traffic.
Esports betting: Three numbers to notice
Earlier this month, we published our H1 2020 Esports Betting Monitor, which included our proprietary survey of esports betting industry stakeholders from around the globe. A few numbers from that survey jump out:
- 81%: The percentage of our respondents who reported that betting on esports increased H2 2019 versus H1 2019. Organic growth was cited as the principal driver of that increase; however, respondents also attributed growth to increased awareness of esports and improvements in esports betting products and marketing.
- 35%: The percentage of our respondents who indicated that in-play betting currently accounts for the majority of their total esports betting volume. This finding isn’t surprising as the very nature of esports events – high velocity and market rich – makes them particularly conducive to live betting.
- 90%: The percentage of our respondents who said that they would pick Counter Strike: Global Offensive (CS:GO) if forced to choose only one game on which to offer esports betting. That finding reinforces our view that the esports betting world can be divided simply into two categories – CS:GO and everything else.
Eilers & Krejcik Gaming LLC is an independent research and consulting firm with branches in Orange County, California and Las Vegas, Nevada. The firm’s focus is on product, market and policy analysis related to the global regulated gambling market. Clients include operators, suppliers, private equity and venture capital firms, institutional investors and state governments. To learn more about the firm, visit http://www.ekgamingllc.com.