Wall Street Times

DraftKing takes Super Bowl opportunity, other sports betting upstarts follow

DraftKing
Image Commercially Licensed from: Unsplash

DraftKings In many states nowadays, gambling is permitted, especially when it involves sports.

Super Bowl LVII is maybe the largest occasion for the gambling sector right now.

High stakes

The Philadelphia Eagles vs. Kansas City Chiefs NFL game is expected to generate more than 50 million wagers totaling more than $16 billion in advance, according to the American Gaming Association.

The following titans of the gambling sector had the chance to draw in additional clients because of the significance of the game:

  • DraftKings
  • FanDuel owner Flutter Entertainment (PDYPF)
  • MGM
  • Caesars (CZR)
  • Wynn (WYNN)

The occasion also affected the stock values of several sports betting companies, with some of their shares increasing in 2023 and the market as a whole recovering.

A couple of the stocks are still recovering some of their significant losses, however.

Stock progress

Over the previous year and the two years prior, DraftKings had drops of 30% and 75%, respectively.

Despite a 40% value fall over the previous year, Barstool Sports is still owned by Caesars and Penn Entertainment (PENN), respectively.

Over that period, Rush Street Interactive, the parent company of BetRivers, experienced a decrease of more than 65%.

Each company made a big investment in pricy advertising campaigns.

Kevin Hart has been spotted supporting DraftKings while Jamie Foxx has been featured in MGM advertisements.

JB Smoove and the Manning family have both endorsed Caesars in television advertisements.

Additionally, sportsbooks have begun to invest money in advertising campaigns like “free bets.”

Two birds and one stone

Now, providers of sports gambling must employ tactics that accomplish two goals at once:

  • Gain new customers
  • Restore investors’ confidence

However, MGM currently has the upper hand in this contest.

Its BetMGM branch only staffs one physical sportsbook for the NFL game. A 50/50 joint venture between the big Las Vegas casino and UK gaming operator Entain is called BetMGM.

In 2022, the Phoenix stadium moved into the space next to State Farm Stadium, where the Chiefs and Eagles formerly played.

There is no disputing that mobile devices have been utilized by gamblers to place bets.

Adam Greenblatt, the CEO of BetMGM, highlighted that both before and during the game, activity at the sportsbook should move rapidly.

“We have prepared for this Super Bowl like never before, said Greenblatt.

“We are staffing up for a lot of demand.”

Read also: Tech layoffs: Yahoo to let go 20% of its staff

Marketing opportunity

Greenblatt claims that there are 38 HD TVs and a massive display wall in the 17,000 square foot sportsbook next to the stadium so that bettors can watch the game.

There are 25 betting bonuses to entice spectators to bet on the game.

In a market where websites like DraftKings, FanDuel, and other bookies compete, having a physical presence at the Super Bowl gives a huge marketing opportunity, according to Adam Greenblatt.

On Sunday, he hopes to persuade users to download the BetMGM app, register for an account, and make bets at the sportsbook.

Greenblatt emphasized the value of marketing by reminding players that MGM is a reputable casino brand rather than a start-up like DraftKings, FanDuel, or Barsteel.

“We’re fun and sophisticated. Ocean’s Eleven. That was an MGM experience,” he said, reminding people it was the MGM Grand in the 2001 film.

“We want to be both aspirational but also accessible.”

Sports betting companies vs. casino companies

Despite the competition, those who are new to the industry are not overly worried about casino operators.

According to FanDuel CEO Amy Howe, there is plenty of space for growth if sports betting is legalized in Ohio, Maryland, and Kansas in 2022.

“This should be the single biggest day in FanDuel’s history,” Howe said.

She stated that FanDuel anticipated 17 million wagers, or more than twice as much as those placed on the Super Bowl in 2022, for Super Bowl LVII.

According to Howe, FanDuel anticipates that the wagering would bring in over 500,000 new customers who will bet on the game, especially as more women do so.

The CEO of DraftKings, Jason Robins, believes that bookies have recognized they cannot continue to spend in pricey promotions.

“If anything, the competition now is less intense than last year,” said Robins.

“Last year was the peak. It was somewhat irrational.”

Wall Street used to penalize businesses like DraftKings for trying to gain market share at any costs.

“Investor tolerance for the types of undisciplined spending during the NFL season last year has waned,” said Robins. “Investors want to see a path to profitability.”

“That’s different from 2021 when customer growth was being rewarded.”

Both FanDuel and DraftKings are still expected to release more Super Bowl LVII advertising.

For FanDuel, NFL player Rob Gronkowski made a field goal that was the “kick of destiny,” while Kevin Hart is the focus of another DraftKings ad.

Image source: PYMNTS

Ambassador

Ambassador