The SBC Summit North America, recently held in New Jersey, shed light on the vital role of iGaming within the business operations of sportsbook entities, along with the potential these operators perceive for future expansion.
Leaning Into Digital: A Strategic Core
One of the key takeaways from the summit was the assertion by Matt King, CEO of Fanatics Betting and Gaming, that “iGaming will be a core part of the strategy.” The statement holds weight given the company’s expansive database of around 95 million sports fans, which they plan to leverage for online casino gambling. Currently, Fanatics Sportsbook operates mobile services in Ohio and Tennessee, however, it’s clear the focus extends beyond traditional sports betting.
The potential for iGaming was also echoed by Christian Genetski, FanDuel President, who stated during the SBC panel, “Within our business, when we think about the future, I think we spend as much time on iGaming as we do on sports betting.”
The Profitability of iGaming: A Numbers Game
The figures speak for themselves. Richard Schwartz, CEO of BetRivers-owner Rush Street Interactive Inc., revealed that in markets where both online sports betting and online casino gambling are prevalent, approximately 75% of revenue comes from iCasino. The value of an online casino player in terms of gross gaming revenue is 5.3 times more than a sports betting-only player, he added. Moreover, a user who participates in both sports betting and online casino gaming generates 14 times more revenue than a sportsbook-only player.
Despite these compelling numbers, iGaming’s legal footprint is smaller than that of sports betting. Currently, only six U.S. states have authorized a full range of online casino games, while 37 states have legalized event wagering. However, some states with regulated online sports betting and land-based casinos could begin to seriously consider iGaming, as New York is already doing.
The Future Landscape: Expansion on the Horizon
Certain factors are currently hampering iGaming legislation, including time constraints within legislative sessions and the absence of a financial crunch that might push states to seek additional revenue sources. Nevertheless, as Genetski noted, “I think we’re getting to the point now where you’re going to start to see more of an expansion of iGaming.”
As the industry continues to evolve, sportsbook operators are gearing up to fully embrace the opportunities that iGaming presents, marking a clear shift in strategic focus towards a more digitalized future of gambling.
Key Takeaways for the iGaming Industry
The SBC Summit North America has elucidated several crucial insights for the future of iGaming. Here are the three most notable implications for the industry:
- Strategic Integration: iGaming has grown beyond being a mere addition to the services offered by sportsbook operators. It’s being recognised as a core component of their strategic plan, with operators like Fanatics Betting and Gaming leading the way. This implies that companies seeking to succeed in this space should consider developing a robust iGaming strategy alongside their traditional sports betting operations.
- Revenue Potential: The statistics presented by BetRivers’ CEO underscore the revenue potential of iGaming. In markets offering both online sports betting and casino gambling, the majority of revenue comes from the latter. Furthermore, customers engaged in both forms of gambling generate significantly more revenue. This emphasizes the importance of adopting a dual approach and targeting the cross-section of sports betting and iGaming customers.
- Legal Expansion: While currently only a handful of states have authorized a full suite of online casino games, there’s a noticeable shift towards considering iGaming. States with regulated online sports betting and land-based casinos, like New Jersey, are paving the way. This suggests an impending expansion of the iGaming landscape, a factor that companies should monitor closely and be ready to capitalize on.