Report: Sports Betting’s Future Is Super-Social
A report from sports analyst Lloyd Danzig says the future of sports betting will trade off the social aspect of all things sports: different bet options, socialization wrapped wagering, and personalization of betting opportunities based on player habits.
According to sports analyst Lloyd Danzig, sports betting’s track moving forward will look a lot like the one taken by fantasy sports.
The early years of fantasy leagues focused on season-long models. But when companies shifted the emphasis to daily competitions, the industry took off, to the tune of $350 million in revenue last year.
In a report initially published on Medium.com, Danzig, founder and CEO of Sharp Alpha Advisors, argues that a similar phenomenon is about to explode in the world of sports betting, with “significant commercial implications.”
More Fun than Money
The social nature of all things sports in the U.S. can be seen in DFS, where 70 percent of players never see a return on their investment long-term, but enjoy the social aspects the activity brings to the table. The same holds true for sports betting. Each year, for example, some 40 million Americans bet on office pools for the NCAA basketball tournament.
But when it comes to organized sports betting, it isn’t that simple. In order to generate $71 million in revenue during the second quarter, DraftKings had to spend $230 million—the cost of entering new states, attracting new customers and operating technology.
Those who have a bullish approach to the U.S. sports betting market claim there’s under-penetration as a share of consumption compared to other countries, and fan engagement plays a central role in any discussion. Before the U.S. Supreme Court overturned the ban on sports betting in 2018, the American Gaming Association predicted legalization would lead bettors to make up 36 percent of the NFL audiences, accounting for 56 percent of the viewing minutes of regular season games. This would also hold true when it came to other sports.
Another factor in the budding sports betting ecosystem speaks to the social aspects of wagers.
Like betting on a game just for something to root for.
Like bragging rights.
Like a reason to wear the jersey.
Like socializing with friends around bets.
But this trend has yet to translate into digital offerings from sportsbooks. Also missing from the discussion is pairing sportsbooks with celebrities as a marketing ploy. (NBA legend Michael Jordan just joined sports betting giant DraftKings as a “special advisor to the company’s board.” It makes sense, though some critics howl that it sets a bad precedent, since His Airness is widely believed to have a big-ass gambling problem).
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Innovative sports betting products can capture a share of the reallocation of discretionary spending in a post-Covid-19 world, Danzig concludes—and hey, we all know that U.S. sports fans, once deprived of their beloved pastime, cherish it even more right now).
Another possibility for the future involves personalizing betting opportunities based on past behaviors, not unlike the way Netflix recommends certain shows based on past viewing habits (yes, Big Brother is everywhere). In a best-case scenario, operators can increase revenue without customers increasing spending.
Put together, these trends “will manifest as a fusion of sports betting, content, analytics, social channels, investment opportunities and experiences into a single, cohesive fan ecosystem that also seamlessly integrates esports, video gaming, online casino play and hobby gamification,” Danzig said.
In other words, strap in and enjoy the ride. Sports betting is revving up to be bigger, better and more fingertip-accessible than ever.
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