Sports Betting’s Future Is Super-Social
A report from sports analyst Lloyd Danzig tackles the future of sports betting in the United States. The future trades off the social aspect of all things sports. Different bet options, socialization wrapped around placing a bet; personification of betting opportunities based on past habits.
In a lengthy analysis on Medium.com, sports analyst Lloyd Danzig said the track faced by sports betting moving forward resembles 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. 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.”
DraftKings and FanDuel, which have 63 percent of the online sports betting market in the U.S., have come up with new in-game betting and other options, as well as new rewards programs.
Except for Nevada, the U.S. has a more nascent sports betting landscape than the more mature U.K. marketplace. Betting parlors in the U.K. operate similar to off-track betting locations in the U.S.—people go there primarily to place a bet, not to socialize. But sportsbooks in Nevada and elsewhere have become social destinations as well.
The social nature of all things sports in the U.S. can also be seen in daily fantasy sports, 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. Some 40 million Americans bet on office pools for the NCAA basketball tournament each year.
But when it comes to organized sports betting, it isn’t so 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 is under-penetration as a share of consumption compared to other countries.
Fan engagement plays a central role in any discussion. Before the Supreme Court overturned the sports betting ban, 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 ecosphere speaks to the social aspects of wagers. Like betting on a game just for something to root for. Like bragging rights. Like socializing with friends revolving around placing 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.
Innovative sports betting products can capture a share of the reallocation of discretionary spending in a post-Covid-19 world. 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. In a best case scenario, operators can increase revenue without customers increasing spending.
“This confluence of 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.