News

News

In NJ Sports Betting, Sports Bettors Are Looking For Sports Brands

This is Part 5 in a five-part series on early lessons from US sports betting markets.  and Part 4 here

Legal sports betting in New Jersey and the US is moving fast. In the last few weeks, casinos and sportsbooks have partnered with sports leagues and sports teams at a rapid pace. MGM just announced another partnership with the MLB.

The strong early returns in newly legalized markets like NJ sports betting and prospects of more expansion in 2019 has the gaming industry buzzing.

But all of that buzz is leading to some hurried decisions and sometimes less-than-perfect legislation. Even though we’re only a few months into this brave new legal sports betting world, there are already valuable lessons to be learned.

In this five-part series, PlayNJ will explore five such lessons:

The final installment of this series will attempt to explain the online sports betting dominance of daily fantasy sports (DFS) operators in the nascent US sports betting market.

DFS companies are beating sports betting companies

The US online sports betting landscape is being dominated by two names: FanDuel and .

Incumbent casinos and sportsbook operators thought they’d maintain their gaming monopoly. They were wrong.

The DFS giants came out of the gate at a full sprint in New Jersey, and as Division of Gaming Enforcement Director David Rebuck put it, they’ve placed traditional sports betting companies on notice.

“My compliments to both of those groups that I normally don’t regulate,” Rebuck said in an August interview with Legal Sports Report. “They’re pushing the envelope and making the traditional groups we oversee in bricks and mortar and internet gambling say, “Hey, we have a little competition here, we’ve got to pick up our pace.”

Essentially, the DFS companies have outhustled, outthought, and outmaneuvered them every step of the way so far.

DraftKings and FanDuel snuck up on some people

Not too many people saw this coming. Furthermore, the idea that companies that were brand new to sports betting could beat more experienced operators to market raised a few eyebrows.

DraftKings has a mobile app live before very, very large gaming corporations with experience in sports betting and online casinos. It’s an extraordinary accomplishment. I have taken DK to task for plenty in the past four years, but they deserve kudos here. https://t.co/mGnq2HNb8K

— Dustin Gouker (@DustinGouker) August 1, 2018

Seriously, a company that has never operated a sportsbook or an online gambling site in NJ beat a bunch of companies that have experience in both. Boggles my mind.

— Dustin Gouker (@DustinGouker) August 1, 2018

But FanDuel and DraftKings didn’t just beat them to market, they’re clobbering the competition.

Since launch, FanDuel and DraftKings account for around 90 percent of New Jersey’s online sports betting revenue.

To be fair, DraftKings was the first online sportsbook to launch and had a brief online monopoly in NJ sports betting.

FanDuel was another early mover.

However, even with several new online sports betting options to choose from, the two DFS companies still accounted for 85 percent of online sports betting revenue in October.

FanDuel and DraftKings success isn’t a complete surprise

If you were paying close attention to the online casino and poker situation in New Jersey, the dominance of FanDuel and DraftKings is less surprising.

First, the companies have a massive database filled with customers who have wagered money on sports online or through a mobile device.

Second, both companies have spent gobs of money over the past few years building up their brands and creating an innovative and fun product.

But it’s the third element that best explains how DraftKings and FanDuel have become two of the biggest players in the burgeoning US sports betting industry.

The right brand for the market

If you decide to play online blackjack, the brands that likely spring to mind are the casinos you’ve visited or know. In New Jersey, that’s brands like ,  and .

Not surprisingly, in a 17 brand market, the eight New Jersey land-based casinos involved in online gambling (two of which just launched in the summer) generate two-thirds of all online casino revenue, according to research firm Eilers & Krejcik Gaming.

As seen in the chart below, E&K’s estimates also have AC casinos occupying five of the top seven market share spots.

Simply put: based on NJ online casinos, customers want to use brands that they identify with and trust.

Like the Atlantic City casinos, DraftKings has a strong brand that is synonymous with US sports and wagering. Or as DraftKings CEO Jason Robins told the Associated Press, “We have a well-known brand that’s very closely identified with winning money on sports.”

In a word association test for online sports betting, New Jersey’s casino brands are going to be beaten by DFS brands.

Enter your Email Address

Leave a Reply

Your email address will not be published. Required fields are marked *

DON’T MISS OUT!
Subscribe To Newsletter
Be the first to get latest updates and exclusive content straight to your email inbox.
Stay Updated
Give it a try, you can unsubscribe anytime.
close-link