EGR

EGR US Power Rankings 2019

The ultimate guide to the market’s biggest online operators

Welcome to the inaugural edition of EGR’s US Power Rankings. Given the explosion of the online gambling industry this side of the pond and the emergence of regulated sports betting, we felt it was the right time to bring EGR’s Power Rankings concept to the US.

Please note, the following rankings are solely comprised of online operators and do not take into account land-based revenues.

1) DraftKings

Two firms were far and away top of the rankings, with almost double the rankings points of third place but with the tiniest margin between them. However, it is DraftKings (DK) that comes out on top, scoring well in just about every category across the board. It was first to market in New Jersey with its Kambi-powered sportsbook and has put that headstart to good use, leading the online betting market in every month until February, when it lost big on the Super Bowl. Its online casino business is also showing exponential growth thanks to some healthy cross-sell. In its first full month of operation, revenues were estimated to be some $2.5m, according to Eilers & Krejcik Gaming, putting it on par already with the likes of MGM.

That a firm which had never taken a bet just six months ago is top of the US online gambling rankings is a testament to just how aggressive the company has been in its deployment. One industry exec, who consulted for DK around the launch of betting, said he was blown away by the ‘just get on with it’ approach among the tech and operational teams. With the launch of a standalone casino app expected inearly Q2 and a major market-access deal with Caesars in the bag, DraftKings looks set to be a massive player for years to come.

 

2) FanDuel Group
Narrowly behind DraftKings comes long-time DFS rival FanDuel Group, which posted perhaps the most well-rounded score on the list coming in second in sports betting revenues, with the second-largest single casino brand via the heavy-hitting Betfair Casino and scoring well among the judges.

The group has undoubtedly benefited from its ability to draw top-class egaming talent from Paddy Power Betfair’s (PPB) business around the globe and has the licensing partners to grab hold of the top spot next year. A wide-ranging market-access deal with Boyd Gaming also solves some of the looming license questions.

The group said recently that almost half its sportsbook customers were coming from the DFS database at a much lower cost than other acquisition routes. “There’s no doubt our fantasy assets give us an advantage,” said PPB CEO Peter Jackson, adding that a “significant number” of the new betting customers were lapsed DFS players who hadn’t played at all in the previous 12 months. With around eight million DFS customers in the US, a figure which is growing all the time, FanDuel Group looks likely to have a significant advantage over traditional sportsbook and casino rivals. Whether it can chase down DraftKings, which enjoys the same advantages, is the bigger question.

 

3) Golden Nugget
While the top two entrants on this list are there on the strength of their sportsbook revenues, Golden Nugget is the first real casino heavyweight and, indeed, is lapping the field in this vertical. The operator has an estimated 50% more casino revenues than its nearest rival, built on the strength of a top-class product and shrewd operations team.
The firm has stressed the importance of its giant games library, with more than 500 titles on desktop and over 300 on mobile, as well as the live casino offering it pioneered in New Jersey. While other casino operators have now launched competing live products, Golden Nugget still has far and away the broadest offering. Whether it can maintain that lead in casino revenues is less certain, however, as the sportsbooks leaders start cross-selling their bettors.

Conversely, Golden Nugget’s success in sportsbook is also still to be determined. It was relatively late to the party, launching in late February with an SBTech sportsbook on the GoldenNuggetCasino.com site. The firm’s success may depend on its own ability to cross-sell its casino database into sportsbook, but it is hampered somewhat by the current inability to book NBA bets due to its ownership’s links with the Houston Rockets. Management is working to get that restriction removed but, in the meantime, it could cap upside.

 

4) Caesars Interactive
Beneath Golden Nugget there is a third-tier made up of two very similar firms, with Caesars Interactive narrowly edging out fellow casino giant MGM. The two firms scored (predictably) similarly across the board, but Caesars boasts an edge in poker and sports revenues.

According to Eilers & Krejcik estimates, Caesars is the third largest casino operator in New Jersey when combining the Caesars and Harrah’s brands. It is also the largest poker operator by virtue of its partnership with 888 via the All American Poker Network, which recently took over the market lead thanks to shared liquidity with Nevada and Delaware.

However, it’s looking increasingly likely that edge could be lost following the recent Wire Act reinterpretation. Caesars is still relatively small in the sports betting world but scored highly among judges on the ‘softer categories’ like influence and potential. As industry heavyweight and SBTech chairman Gavin Isaacs said recently about Caesars: “It’d be hard to screw a brand like that up, I’d imagine.” That may be the case, but the path to growth for Caesars is also not without challenges.

 

5) MGM Resorts
Narrowly behind Caesars is MGM, which presents its own ranking challenges due to its joint venture with London-listed GVC Holdings. MGM was credited with all revenues from the MGM and Borgata brands and half the revenues from the shared poker network.

The Borgata contribution helped make MGM the second-largest casino brand in New Jersey, but MGM continues to punch below its weight on sports and casino – although the operator would be quick to tell you it is refining the product before making a big marketing push.

The firm did indeed score well on influence and potential and has inked partnerships with just about every major sports league in the US. As part of that, it will receive some unique proprietary data and have the chance to create some brand-new products that could set it apart in a crowded sports marketplace. The deals will also help put the MGM brand in front of sports fans, while its MLife rewards database could prove to be the ultimate joker in the pack, if it’s anything like as powerful as the DFS databases have proved. In GVC it also has the perfect partner for tackling a fast-changing industry.

 

6) Rush Street Interactive
Rush Street Interactive (RSI) is a relative newcomer to New Jersey, with the state originally seen as a testing ground to ensure RSI could hit the ground running when Pennsylvania rolled out online gaming.

At the time of writing, we’re still waiting for that happy day, but in the meantime, RSI has blown past expectations in the Garden State. PlaySugarHouse is the sixth-largest online casino brand in New Jersey, with the platform having been developed in-house and constantly tweaked internally to keep it fresh and unique. “Most pleasing to me in these past two years is that we’ve improved our product every single day since launching,” RSI president Richard Schwartz told EGR late last year.

The firm followed that up by being first to launch an integrated sportsbook/casino app in New Jersey, and only behind DraftKings in getting a betting product live. The firm had approximately 4% of the sports betting market in December and is well set up for whenever Pennsylvania finally comes online.

 

7) Resorts Digital
Resorts is fittingly the seventh-largest single casino brand in New Jersey, and has increased market share to around 7% in recent months. It’s an impressive return for the smallest land-based operator in Atlantic City and the last of the brick-and-mortar firms to join the online market.

Sources familiar with the business say it has benefited from a genuine focus on creating a real-money online gaming business that does the basics well, including marketing, affiliates and bonusing. It may not make headlines but it’s effective.

The sportsbook was also launched at the end of January, powered by SBTech but it’s too soon to see how that vertical is performing. One judge described Resorts as a one-state operator, but it’s understood the firm is keen to take its online gaming expertise to other states should it find the right partners and conditions to do so.

 

8) William Hill
William Hill checks in lower than some might expect, but the firm’s retail power is not accounted for, and it has no online casino revenues to speak of as yet. However, it has established itself as the third-largest online sports betting brand, with around 12% market share, and scored highly on future potential.

In its recent FY 2018 results, Hills said its New Jersey brand awareness had increased from 5% in September to 22% in February 2019, while its share of the mobile market grew each month since launch to 12% in January 2019. Hills also pledged improvements to the product and customer experience later in 2019 when it launches a brand new technology platform, built for the US market in partnership with NeoPollard Interactive. The arrival of the platform will also herald more investment in marketing.

 

9) Tropicana
Tropicana is another brand that proved difficult to rank. On the one hand, the brand clearly has inherent power in New Jersey. It is the third-largest single online casino revenue generator in the state, per Eilers & Krejcik, only behind Golden Nugget and Betfair. It is also the third-most efficient, when calculating revenue divided by number of games on the site.

The last sentence is crucial. The brand has suffered from a lack of TLC over the past year as Tropicana has been acquired by El Dorado, which has shown little to no interest in running an online casino site itself. Gamesys has been running the site in the meantime but has also been holding back the investment reins thanks to the uncertainty about its future. That online casino contract expires at the end of next year, and EGR NA understands there is currently an open bidding process to take it up, with both William Hill and Gamesys involved.

 

10) Hard Rock
The Hard Rock has made a flying start in New Jersey and already boasts the eighth-largest casino brand, with an approximate 5% share, despite only launching in June last year. Indeed, it has posted growth in every month since launch, and unveiled its online sportsbook at the end of January.

Both offerings are powered by Norwegian gaming provider GiG, with one judge noting the two firms had shown “good innovation and a great brand.” Hard Rock’s online gaming chief Kresimir Spajic told EGR last year that brand would indeed be the key differentiator for Hard Rock, with the firm enjoying “a huge advantage over everybody in the market on this.”

“We have a global awareness of 82% and almost 90% in the US where we aren’t just a casino brand but a music, entertainment and lifestyle brand,” Spajic said.

 

11) The Stars Group
Stars is also lower than perhaps some might expect given the might of the company (third overall in the global EGR Power 50 rankings), but the operator has yet to fully bring that firepower to bear in the US. The firm earned the best score on poker revenues, but came just 17th in online casino revenues, while its BetStars contribution is still negligible. The bigger story here is what’s to come, as at the time of writing whispers of The Stars Group announcing a partnership with a large media brand are everywhere. “It’s less whispers and more like roaring,” said one exec when questioned about a forthcoming deal. The long-term plan is to use the expertise acquired with Sky Bet to build a media/bookmaking giant.

 

12) 888 Holdings
The London-listed operator 888 is another European giant that isn’t yet posting standout numbers in New Jersey, but it has been quietly building the infrastructure required to take market share. In the last couple of months alone, 888 bought out its private equity partner in the All American Poker Network, partnered with the New York Jets and acquired a sports betting platform from Irish bookmaker BetBright that could ultimately be used to target the US. The firm also recently moved its SVP business development, Yaniv Sherman, to the US, signaling its intent for the market. The recent Wire Act reinterpretation could hurt its poker operations though.

 

13) Pala Interactive
Pala has long punched above its weight in New Jersey, with the brand offering poker, casino and bingo, despite a relatively small online team, and with backing from a California tribe rather than an international listed corporation. Much of the technology has been developed in-house, which can increase time to market but should help Pala enter new markets. The firm recently agreed a deal to integrate SBTech’s sportsbook into its proprietary platform, and while it’s not yet been launched in New Jersey, it’s surely only a matter of time.

 

14) GVC Holdings
GVC received the credit for its B2C revenues through the partypoker and PartyCasino brands, though of course it would rank significantly higher were its B2B and JV revenues included. The operator last year overhauled both brands, launching a dedicated PartyCasino site and overhauling the front-end with improved navigation, a modern interface and a fusion of purple and pink hues. A live casino product was also added in late 2018, with GVC suggesting the latent power of the party brand in the US market could help it expand as the market opens up.

 

15) Mohegan Sun
Mohegan Sun launched in July 2015 as a sister site to Resorts online casino, on the same license and using the same NYX platform. The Connecticut casino brand, however, generates less than half the revenues of its New Jersey sister, good for around 3% of the market, with judges pointing out a relative lack of innovation, and the absence of a dedicated affiliate manager.

 

16) Gamesys
The UK operator received credit for revenues from the Virgin brand which offers casino and bingo, and currently holds an estimated 3% market share. Judges noted the lack of PayPal and a relatively limited slots offering, with around 217 titles compared to 500+ at some sites. However, it also received plaudits for its V* Points rewards system and ease-of-use.

 

17) PointsBet
PointsBet actually tied for first in judges’ scoring for product and innovation, reflecting just how much of a splash the Australian bookmaker has made in New Jersey. As noted later in this magazine, the firm has managed to get sharps and the public onside with promotions like no-vig lines for the Super Bowl and ‘Good Karma’ pay-outs for bad beats. The points betting product is a genuine one-of-a-kind in New Jersey, and the operator has reported that almost half of its customers have already tried it out.

 

18) Ocean Resorts
Ocean Resorts is another latecomer to the online scene, soft-launching in July 2018 and not enjoying quite the same immediate success as the Hard Rock offering. The platform comes from GAN, which has helped the likes of Betfair punch above its weight so further improvement is expected on its current 2% market share. No official announcement has been made about an online sportsbook but the on-property book, run by William Hill, is said to be delivering some of the best numbers on the boardwalk so an online offering might not be far off.

 

19) Churchill Downs
The Kentucky-based operator only went live with an online sportsbook and casino, powered by SBTech, in February, but could be one to watch based on the strength of the brand and the power of its horseracing bettors database. Churchill Downs CEO Bill Carstanjen said his company hopes to exceed customers’ expectations by drawing on the company’s experience running its advance deposit wagering site TwinSpires.com. Elsewhere, Churchill Downs has positioned itself to launch online gambling in both New York and Colorado via a deal with Saratoga Casino Holdings, pending approval.

 

20) Scores
The gentlemen’s club brand entered the new New Jersey online casino market with its ScoresCasino.com back in August 2017, essentially as a skin for Pala Interactive, featuring the same sign-up offers, loyalty program and UX as Pala-Casino.com. Pala Interactive CMO Jeremy Clemons told NJonlinegambling.com the deal was more akin to an affiliate partnership than a traditional white label agreement.

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