Posted on: September 27, 2023, 09:48h.
Last updated on: September 27, 2023, 09:48h.
In the aftermath of the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA), the US iGaming and sports wagering industry experienced significant growth. Initially, it was thought that land-based casinos would dominate the online market, but bettors are instead displaying strong loyalty to DraftKings and FanDuel.
A recent survey conducted by JPMorgan among 1,100 sports bettors and online casino players confirms the dominance of DraftKings and FanDuel in terms of market share and user experience. Approximately 70% of respondents expressed a preference for one or both of these apps, aligning with their respective market shares.
Potential Challenges for Omnichannel Efforts
Despite the popularity of DraftKings and FanDuel, there is still hope for the omnichannel gaming strategy.
Operators such as BetMGM and Caesars Sportsbook are capitalizing on their extensive land-based casino rewards programs to offer incentives to iGaming and online sportsbook clients. These rewards can be used at both Las Vegas Strip and regional casinos. Reports indicate that these efforts are yielding positive results, with BetMGM and Caesars Sportsbook clients visiting physical venues and spending money there. However, recent cybersecurity incidents involving Caesars and MGM could impact customers’ willingness to transition from apps to physical casinos.
“The success of the omnichannel strategy relies on positive in-person experiences, so there is a risk for MGM Resorts International and Caesars Entertainment, given recent cybersecurity incidents,” warned JPMorgan analyst Joseph Greff.
Promotional Spending and iGaming Insights
While iGaming is only legal in six states, customer loyalty trends in this sector mirror those seen in sports betting. DraftKings and BetMGM are engaged in a fierce competition for dominance in the iGaming market. BetMGM and Caesars have an advantage as they can promote their land-based casino offerings to online clients.
Promotional spending is generally higher in states where sports betting is relatively new, and DraftKings leverages this to foster customer loyalty.
“In existing states, lower promotional intensity contributes to stronger user loyalty towards well-known brands. We anticipate that product improvements will drive further loyalty across operators. In terms of parlays, we believe that enhanced same-game parlay products and improved merchandising could entice new users to invest sign-up bonuses into larger parlays,” concluded Greff. “In new states, 67% of users indicate that over 20% of their bets are placed on parlays, compared to 60% in existing states.”