Throughout 2023, the sportsbook market in the USA has been flourishing with great dynamics. New projects were launched, some brands decided to expand their operations across the country, and even the 1st signs of potentially changing leaders arose.
Let us review the most significant of these occasions in more detail.
The Launch of ESPN Bet
The appearance of this digital sportsbook in the local segment promises that 2024 will be intriguing in terms of competition. The brand belongs to the Penn Entertainment corporation and is already launched in 17 states. During the 1st week of operation, its betting application was downloaded over a million times. The eventful Thanksgiving period contributed to these results.
High chances for the business' success are caused by the 2 main factors:
- the nature of ESPN as the largest US sports media brand;
- the rich and long-time experience of its parent company.
Jason Robins, the CEO of one of the local leaders, DraftKings, admits that he keeps a close eye on this competitor, which testifies to the new project’s amazing potential. Meanwhile, the VP of ESPN’s sportsbook division is actively expressing his delight regarding the flawless launch. In Mike Morrison's opinion, the 1st results are really good and the teams are thrilled to continue productive work.
Confrontation Between 2 Leaders
While ESPN Bet’s full potential has yet to be realised, DraftKings and FanDuel have an ongoing battle for the top position. In November, the latter cemented its influence in NY, a province that has the highest sportsbook revenue.
The Flutter-owned brand achieved the following results:
- handle — $ 923.4 million;
- profits — $ 69.2 million for the month.
DraftKings became 2nd with such figures:
- handle — $ 723.1 million;
- profits — $ 54.3 million.
Although FanDuel’s team has been on the top in the state’s market for some time, its main competitor had been successfully minimising the gap until the last month of this autumn. For now, DraftKings operates at a net loss of $ 283.1 million. However, the operator experienced a rise in its earnings guidance for the 3rd successive quarter. Additionally, the current negative balance is much lower than a year ago ($ 450.5 million as of Q3 2022) and earlier.
The company’s chances of achieving net profitability in H1 2024 are increasing, yet its rivals do not cease to grow either.
BetMGM’s Results and Forecasts
The operator’s representatives expect to gain $ 500 million in positive EBITDA and 25% US market share by 2026. Adam Greenblatt, the corporation’s CEO, is optimistic about their results for the 3rd quarter. However, Goldman Sachs, an American multinational investment bank and financial services supplier, pointed to BetMGM’s stagnation.
The following facts prove the concern:
- The brand’s US market share was 18% in both Q3 and Q2.
- The difference between Q1 and Q3 in the same category is only 1%.
- The operator’s revenue in NY was $ 7.9 million, way behind the 2 leaders' results.
To improve the dynamics, Mr Greenblatt plans to focus more on Las Vegas in 2024 as the city is set to host more sports events. It is a wise choice, as the destination attracted 300,000 spectators during the last local Formula One competition. That occasion led to the operator breaking its record in terms of handle, which was 3 times bigger than in any other race.
In February, the city will welcome everyone for the Super Bowl. In Mr Greenblatt’s opinion, this is yet another great opportunity for his company to make it in Las Vegas.
Fanatics Betting & Gaming’s Ambitions
As of now, FBG is far from being able to directly battle with local leaders despite its good results. However, Matt King, the brand’s newly appointed CEO, is enthusiastic to dive into the challenge and try to catch up with the frontrunners.
Previously, the expert took the same high-ranking position in FanDuel, so its rich experience can help a lot in leading FBG to success. Nevertheless, the executive highlights the differences between the 2 companies. Thus, the copy-and-paste strategy will not be suitable here. The corporation needs a unique, tailored approach.
This summer, the brand acquired PointsBet’s US operations. The agreement’s value changed several times:
- Initially, FBG offered $ 150 million.
- Then, DraftKings raised the bar to $ 195 million.
- Finally, the deal was closed by Fanatics for $ 225 million.
Since then, the operator has presented the sportsbook in 8 states across the country. Colorado became the last province on the list at the beginning of December. Also, the brand took the position of an exclusive bookmaker associate for the Connecticut Lottery. FBG will roll out its active operations in the state quite soon.
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