After a few days of discussion at this year's Global Gaming Expo, the future of legal sports betting sounded a bit like the nature of gambling itself: a lot of money wagered on uncertain outcomes.
What do players want? What will lawmakers and regulators allow? What sports betting sites will be left standing a year from now? And what’s the next big thing? Those were among the questions looming above the crowd at the Venetian Expo during G2E.
One certainty is that the number of new markets in the United States is running low, with 38 states having taken the plunge and authorizing event wagering. Others, such as California and Texas, remain big question marks but are years away from joining the fray at the earliest.
The slower pace of legalization is not lost on sportsbook operators. In fact, they may use this quieter period to reevaluate their current approach, giving bettors something new or better, or perhaps an innovation that just helps players drop a few extra bucks.
“The operators, they recognize they now need to think about the way they’re going to change that experience so that it becomes a lot more user-friendly,” said Andrew Bimson, president and chief operating officer for North America at data and technology company Sportradar AG, during a G2E panel on Tuesday. “So I think there’s going to be a significant investment inside of the technology platforms and what that starts to look like.”
Bimson was joined on the panel (titled "Legal Sports Betting: Where We Are Headed") by Joe Asher, president of sports betting at technology provider IGT and the former CEO of William Hill U.S.
“I agree that the pace of legalization having slowed, it’s going to really create a big focus on how do you get more money out of your existing states,” Asher said.
At #G2E2023, Andrew Bimson, Sportradar's President & Chief Operating Officer, North America, joined Joe Asher of @IGTNews and @BusinessInsider's Ashley Rodriguez, to discuss the future of legal sports betting, and the tech that is powering the growth and evolution of the market. pic.twitter.com/tYGKncFunY
— Sportradar (@Sportradar) October 11, 2023
There are a lot of ideas about how to get that money. Although it’s uncertain they will succeed, they are definitely coming.
“While they might have a stagnation from a state standpoint, I think you’ll just see more products enter into the marketplace,” Bimson said.
The Sportradar exec floated a few ideas about where things may be headed. One that he and other Sportradar representatives at G2E suggested was in-play wagering, which the company says accounts for around 70% of handle globally but 30% to 35% in the U.S. Bimson noted that U.S. sports already have a lot of stoppages that offer opportunities for in-play betting (such as TV timeouts) that could help increase the action.
“So I really think there’s going to be this opportunity for, I guess what I might consider like disruptive technologies, that are going to steer this in a very, very different direction as consumers become more comfortable betting,” he said.
Making micro the macro
That in-play wagering could include microbetting, such as wagering on the outcome of the next pitch in baseball or the next drive in football. Several operators now offer such markets to customers, but it remains a newer and smaller part of the business. For the leagues, though, which have become partners with sportsbook operators, microbetting could help drive TV ratings and ad revenues.
“This is a wonderful way to bring people back into a sport,” Bimson said. “The leagues have always felt that a lot of their audiences are timing out on them. They’re leaving after the first quarter, they’re leaving after the second or third inning. If there's an opportunity to get re-engaged with them and bring them back into that particular sport, they will jump on that.”
Asher said he was interested to see if microbetting ultimately succeeds and how much interest there will be from players. He recalled the old days of people wagering $10,000 on whether a run would get scored in the next inning of a baseball game but noted that was for a full inning, not just a single pitch or plate appearance.
“Is there that pure betting opportunity?” he asked. “Or will folks just think it’s disruptive to the betting experience?”
The personal touch
Asher also called himself a “big believer in personalization,” citing his experience with YouTube TV serving him suggested viewing options that differ depending on the day and time he’s watching. The IGT executive said betting apps ought to show markets the bettor is interested in based on their past behavior, like Asher’s fondness for taking the Under in hockey games.
“I think that type of personalization is something that we’re going to start to see coming from operators in the near future,” he added.
G2E quote of the day (Non-Hornbuckle Division) came from Joe Asher, the president of sports betting for IGT (and previously the CEO of William Hill US).
— Geoff Zochodne (@GeoffZochodne) October 10, 2023
Asher said he liked to bet the Under in hockey games "because you're a winner until you're not."
But is there something truly new on the horizon? Five years after the U.S. Supreme Court decision that paved the way for the expansion of legal sports betting, Asher said the “biggest product innovation” has been same-game parlays. He offered an explanation for why they may be so popular with bettors, noting Americans' familiarity with buying lottery tickets.
“I think there’s an element of people want to risk a little to win a lot,” Asher said. “The jackpot mentality that’s been ingrained in the culture of this country for a long time … I think that sort of thing continues and will continue to be appealing to the player.”
SGP bettors could become more price-sensitive, shopping around for better odds. Asher also suggested that “some other version of a jackpot-type wager” could emerge to meet that demand for low-risk, high-reward wagering.
New kids on the block
What may help drive innovation in the world of legal sports betting is fresh competition. Two names drove a lot of conversation at G2E, Fanatics and the yet-to-launch ESPN Bet on which PENN Entertainment is working. Asher said he expects at least one of those names to start gaining “real traction” in the market, and his panel counterpart outlined the ammunition they have that could make it happen.
“ESPN has been on the fringe for a while, playing around whether they’re going to be in or they’re going to be out, does [majority owner] Disney like it, does Disney not,” Bimson said. “But I think as a media conglomerate, it was only a matter of time before they pushed into that. They had 25 million subscriptions in Q1 alone. That’s a tremendous amount of tonnage of people that they want to attract.”
Bimson also noted that Fanatics has a similar army of customers, albeit from their massive sports merchandise operation and collectible business.
“They’re not tied to betting,” he said. “It’s part of one of the three things they do. So those two alone, I think are going to be really interesting to watch in this space.”
The arrival of Fanatics and the looming entry of ESPN Bet is on the radar of the current leaders in the U.S. sports betting market, DraftKings and FanDuel. But, according to their CEOs, they welcome the competition, even if they’d also like to see stronger action taken against illegal operators.
“I think there's always going to be new companies coming into the market,” DraftKings CEO Jason Robins said on Wednesday. It's always going to be competitive, but I think that's great. Again, that's the purpose of legalization of all this is to allow real companies to compete.”
The actual new markets
Robins and FanDuel CEO Amy Howe noted there are opportunities offered by up-and-coming sports leagues, such as Formula 1, which is scheduled to hold a race in Las Vegas next month.
Another category that operators are embracing is women’s sports, with Robins saying they have seen “tremendous growth” in wagering, and FanDuel reporting more and more female users. Asher said more women are betting on sports now than ever before.
“There’s that emerging market of women’s sport, the importance of women inside of this industry,” Sportradar’s Bimson said. “And I just think that’s going to … get more and more traction through the course of the next 12 months.”
To embed or not to embed
Not everyone agrees on where things are headed. Bimson was bullish about users being able to watch and wager on games at the same time on the same screen. He even predicted a day is coming when users could touch a player on the screen and get stats or analytics about them.
“We’re a firm believer that that integration, that embedded betting opportunity, is going to be a massive game-changer inside this business,” he said.
Asher seemed a little more bearish about it, noting IGT was concerned about adding a video stream of games to a bar-top machine where you could bet on sports because there may be games on a bar TV in front of the player streaming faster.
“I think betting historically has largely been a compliment to the viewing as opposed to having it all on the same page,” Asher said. “So I am particularly interested to see the success or lack thereof of video on the phone, on the betting app.”
