When the New Jersey Division of Gaming Enforcement released individual sports betting operator revenue for the first time, it’s unlikely anyone had PointsBet hauling in more March profits than DraftKings.
That’s exactly what happened, though, as the Fanatics Sportsbook-owned mobile operator recorded $20.1 million in gross gaming revenue, $2.5 million more than one Garden State’s market-share leader and about $9.4 million behind FanDuel.
How did this happen? After all, Fanatics hasn’t migrated its platform in New Jersey yet, despite acquiring Australia-based PointsBet’s U.S. holdings last summer.
There is no marketing under the growing, relatively new Massachusetts-based gaming company.
How did PointsBet produce two years of revenue in one month?
Chunks of revenue
According to Eilers & Krejcik Gaming, a marketing and research firm, Fanatics has been focusing heavily on building its VIP program, despite the lack of a new platform.
Eilers & Krejcik Gaming reported that PointsBet has generated $30 million, 17.5% of the market share, since January by focusing on finding new and taking care of its top clients. That’s “roughly 17x PointsBet NJ’s trailing three-month GGR and 2x its trailing 12-month GGR, per our estimates.”
The marketing and research firm also cited a Wall Street Journal report that PointsBet hauled in 70% of its 2019 and 2020 revenue from 0.5% of its customers, also known as the big bettors.
“While the industry continues to be reliant on a small customer cohort for large chunks of revenues, we expect these monthly swings in individual states to continue,” Eilers & Krejcik Gaming reported.
Good for Garden State
This bodes well for other sportsbook operators concentrating on select bettors.
DraftKings, according to Eilers & Krejcik Gaming, acquired some of FanDuel’s VIP clientele that helped the rival reach market-share leader for a short time.
New Jersey newcomer Prime Sports entered the market this month with a different approach. It’s offering all bettors the ability to wager without getting limited after success, and it’s targeting players who have seen their max bets drop at other sportsbooks. That’s likely to also bring in big bettors and possibly cut into the VIP market.
