GVC CEO: MGM loyalty program to contribute up to 10% of Roar Digital online revenue
Operator expects to settle at a long-term CPA of $250 through direct marketing and partnerships
GVC has said it expects the integration of the Mlife MGM loyalty program to contribute up to 10% of the Roar Digital JV’s online revenue in the US, as of H2 this year.
Speaking during the London-listed firm’s Q2 results presentation yesterday, new CEO Shay Segev said the US business had integrated all BetMGM customers onto the loyalty programme and marketing across the platform was increasing.
Segev said: “With our experience in the UK cross-selling between retail and online, I think it’s realistic to aim for 5-10% of online revenue to be driven by omni-channel customers.
“I think that’s a realistic target, although clearly It won’t happen overnight and it will take time to ramp it up,” he added.
The focus of the call was very much around CPAs [cost per acquisition] in the US, with Roar expecting to reach a long-term CPA of $200-$250 when considering its partnerships with Yahoo Sports, professional sports teams and leagues and the Mlife programme.
“Through Covid-19, we’ve seen [CPA] between $200 and $300, but with sports resuming and an increase in competitor marketing it will probably go into the higher-end of up to $500 and in the longer-term it will come back down to $200-$250,” Segev told analysts and investors.
Comparatively, DraftKings and FanDuel have previously said their current CPAs are just shy of $250.
The group expects to lose $52.4m via its US business in 2020 on continued expansion into new states, without considering MGM’s share of the JV.
Losses will be higher in 2021 and 2022 with Roar expected to turn a profit by 2023, as previously forecasted by MGM CEO Bill Hornbuckle.
Segev said the operator had seen a “massive uptick” in customer acquisition since sport returned in July.
Its Colorado FTPs have increased 3x over pre-Covid-19 rates.
He said BetMGM was the fastest growing brand in New Jersey, boasting almost 20% of the market share while others’ share declined or stagnated.
However, Eilers & Krejcik Gaming estimates the operator had a 9% share of the sports betting space in the Garden State throughout July, which is an all-time high.
In NJ, GVC + MGM's ROAR Digital took 9% share of the online #sportsbetting market (GGR) in July—an all-time high. Similarly, in IN, ROAR took 11% online GGR share in July—another all-time high. Some spoils from that freshly padded war chest being put to good use, it appears.
— Chris Krafcik (@CKrafcik) August 13, 2020
On the $1bn investment into MGM Resorts that Vimeo operator IAC made last week, Segev said the media giant’s background in digital business and brands would be a welcome addition to Roar and he looked forward to working with them.
He said it was too early to say how much involvement IAC would have in Roar’s operations.