Two of the largest players in the online sports betting sector shared comments on how the market began and where it’s going during the inaugural Benzinga Titans Sports Betting Sumit.
A Look Back Over Five Years: It’s been five years since the Professional and Amateur Sports Protection Act of 1992 (PASPA) was overturned and paved the way for legalized online sports betting in the U.S.
Since then, sports betting companies had the opportunity to launch in states that legalize and the pace was quick, something leaders at companies shared with Benzinga’s audience.
“The pace of adoption has really been staggering,” BetMGM CEO Adam Greenblatt said.
Greenblatt noted that what transpired since the establishment of BetMGM, a unit of MGM Resorts International MGM, in 2018. Greenblatt called the past five years “truly remarkable.”
FanDuel President Christian Genetski echoed the fast pace of the past five years.
“It’s been the longest and fastest five years of my life,” Genetski said.
Genetski said that one of the big questions in 2018 was if daily fantasy sports (DFS) companies such as FanDuel would be the leaders in sports betting.
FanDuel, a unit of Flutter Entertainment PDYPY, was one of two market leaders in DFS with DraftKings as PASPA was overturned.
The FanDuel president said the big joke from investors was how 20 companies that claimed they were going to have a 15% market share in the online sports betting sector were going to pull it off.
“I’m not shocked that we’ve gotten the map as opened as we have.”
Genetski said what surprised him the most was how much bigger the market was than estimated with higher value per user and higher market penetration among the adult population.
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The Present: Genetski said FanDuel had a drive to succeed and is still growing in the legacy states it operates in along with the new states that come online.
“We are a little further along and more bullish today than we were five years ago,” Genetski said.
The FanDuel president said the company plans to continue partnerships with sports leagues and teams to make sure the company has a presence in front of fans.
“We want FanDuel to be the sports betting platform of choice.”
Greenblatt shared on the strength of iGaming with BetMGM live in five states and jurisdictions, stating he believed the company to be a market leader in the territories it operates in.
The Future and New States: Greenblatt shared with viewers that BetMGM is pushing forward toward profitability with the aim to hit positive profits in the second half of 2023. This came thanks to positive unit economics and getting to a certain scale with fixed costs along the way.
The BetMGM CEO said the company is not pulling back dollars for marketing but is taking a look at past partnerships and their past and potential return on investment.
New states add to the TAM, or total addressable market, and none might have as big of an impact as the legalization of online sports betting in California.
As the most populous state, California could bring one of the biggest markets online for sports betting companies.
Greenblatt said California coming online would have an impact on BetMGM and future estimates.
The state has not moved as far forward despite lobbying efforts from Genetski and others.
Genetski said the plan was to have the Native American tribes be gatekeepers in California and a campaign was started well in advance, before $200 million was spent against the lobbying efforts of the sports betting operators to stop the push forward.
“Fair to say the larger tribes in the state decided it was too soon for them, weren’t that comfortable for that,” Genetski said.
Genetski said the lobbying effort helped sports betting operators learn a lot along the way as they pause and work on a compromise with tribes in California to get to the finish line for citizens, the government and tribes all to win.
Watch a video of the discussion below:
Photo: Shutterstock
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