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1. BETMGM IS FANDUEL'S BIGGEST THREAT
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BetMGM is the most likely contender to eat into FanDuel’s U.S. OSB market share dominance in the medium term, according to our latest special report, published Monday. We analyzed which factors are driving FanDuel’s U.S. OSB success and how defensible those are.
A few key takeaways:
- BetMGM emerged as the number one contender, as it shares many on-paper advantages with FanDuel—including strong institutional expertise from Europe and major financial firepower.
- However, major caveats do apply to BetMGM’s challenger status, including its at-times shaky-looking JV foundation, which may slow down decision-making and investment.
- As a result, we think FanDuel is more likely to lose increments of share to BetMGM and other challenger brands rather than to one big rival.
- We identified a universe of seven brands as potential challengers to FanDuel’s dominance in the medium term. Some possess many of FanDuel’s key traits (e.g., DraftKings), while others claim far fewer (e.g., Barstool).
- We further identified a short list of wildcards (e.g., bet365, Fanatics and Hard Rock) that have compelling, albeit hard to quantify, disruptor potential.
- Bottom line: We think those brands together have the potential to take between 5-10% GGR share off of FanDuel in the next few years—though that would mean FanDuel would still hold a very commanding ~30% top-line share of the U.S. OSB market.
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2. TRENDING UP / TRENDING DOWN
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📈Trending up: Sportradar US. Sportradar turned a profit from its U.S. business for the first time in 3Q22. The data firm posted adjusted EBITDA of $3.5mm for the quarter on revenues of $33mm (+61% y/y). For comparison, Genius last week posted a 70% y/y increase in U.S. revenues to $23.5mm, though the company did not break out EBITDA for the division, suggesting it is still negative.
📉Trending down: BetRivers’ U.S. OSB GGR share. BetRivers saw a 2.8% nationwide OSB share in 3Q22, per our estimates, and a 2.4% share in September (the start of the NFL season of course). That’s down from 3.2% in the trailing 12 months to September 2022. BetRivers parent Rush Street Interactive noted in its recent earnings it had slowed marketing spend in NJ ahead of rebranding SugarHouse to BetRivers. But the numbers also reflect a growing focus on non-U.S. OSB markets like Colombia and Mexico, and on casino in US markets where it is available.
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The AGA estimates more than 20mm Americans will bet $1.8bn on the upcoming soccer World Cup—the first with really wide scale legal betting in the US.
- Those might seem punchy figures for a relatively niche sport, especially with the group games played at 5 a.m., 8 a.m., 11 a.m. and 2 p.m. on the East Coast.
- However, soccer betting is already a sleeper product in U.S. OSB. In CO, it's around 4% of revenues, and based on channel checks it’s similar in other states. It’s in the same tier as hockey and tennis and not far from college football.
- The reason is its availability. There is always soccer being played somewhere, any time of night and day.
- As a result, in-play soccer is almost a casino-lite product: it is always available and the pricing models have been so well honed over the years that margin is relatively stable and assured.
- Back to the World Cup: The tournament can be a success for books, even if it's a dud revenue-wise. As long as it introduces more bettors to soccer as an off-peak betting product, then it will be a success, in our view.
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Partner
Eilers & Krejcik Gaming
@AKrejcik / Linkedin
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5 Corporate Park, Irvine, California 92606, USA
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