When the US Supreme Court ruled that all states could legalize sports betting, the gaming activity was billed as a game of skill, different from the games of chance or luck that you find at casinos. However, more than three years after that historic ruling, leaders of two major US operators have come out with different viewpoints on sports betting – or at least the way they want to offer it.
To borrow a popular online phrase, they’re now saying the quiet part loud.
Earlier this month, Bally’s Corp. Chairman of the Board Soo Kim during his keynote remarks at the SBC Summit North America at the Meadowlands Convention Center said one of the current challenges facing sports betting is that it caters to a very narrow market now.
Kim pointed out that the current “first-generation sports betting apps” cater to a very niche group. Of US cable TV subscribers, only 11 percent who get ESPN actually watch the sports network, Kim said. And of that 11 percent, just a sliver of that group is actually engaged enough “to feel confident about handicapping” and betting on sports.
When asked by CNBC’s Contessa Brewer what must happen to change that, Kim described an immersive media experience with a better user interface than the one that currently caters to a very niche audience.
The kind of opportunities that will come in the next generation, you’re talking about more of an integrated experience, where anyone, a casual fan, anyone that’s watching a game can feel like, ‘Oh, I can place a wager, or I have an opinion what’s going to happen next,’” Kim told Brewer. “It’s going to be more luck-based, less skill-based. It’s going to be a much wider funnel because everyone will take a shot.”
Kim: Bigger Market for Luck, Than Skill
For Kim, it’s about maximizing the “addressable market,” which he thinks others are looking at in the wrong way. There aren’t as many people as some think who are willing to put down $1,000 for a football game.
The bigger market is for the more casual bettors who would play a game that’s “less about skill and handicapping and more, just about fun – like sports lotto or sports slots,” Kim said.
He also sees the lines blurring between what many consider a game of chance with slots or games like roulette.
“If you think about what sports is, it’s just a random number generator and content,” Kim said. “You could create any paytable you want to and deliver whatever customer experience that you want to.”
DraftKings CEO: “an Entertainment Activity”
The day before Kim spoke at the SBC Summit, DraftKings Co-Founder and CEO Jason Robins spoke at the Canaccord Genuity 2021 Digital Gaming Summit, and his comments generated some raised eyebrows.
Robins was asked about some of the company’s financials that investors zeroed in on during the last quarter. He was also asked about customer acquisition costs and customer retention rates.
Then, toward the end Canaccord’s Senior Managing Director Michael Graham asked how DraftKings will “out-compete” other sports betting and iGaming operators in US states. Is that through a user interface, an entertaining product, or “the economic proposition to the player,” Graham asked.
After talking about features like a shared wallet and curated products for players, Robins delved into the types of customers DraftKings wants.
“This is an entertainment activity,” he said. “For people who are basically doing it for profit, those are not the kind of players we want. People who are doing it for entertainment are the players that we want.”
Robins Clarifies Position on Sports Betting
This past week when DraftKings launched its sportsbook at the Foxwoods Casino in Connecticut, Robins said on VSiN – an online sports betting network DraftKings owns – said that comment had been taken out of context but at the same time said he also could have said what he meant in a better way.
In that conversation, Robins said that what DraftKings really doesn’t want are the professional bettors. Those individuals look to manipulate lines and “mess around with the ecosystem,” he explained.
“Absolutely we want people winning… Somebody who’s winning just because they’re good, that’s great,” Robins told VSiN. “All day long we like those customers, because part of the appeal of the product is to win.”
Winning, or the realistic chance of it, is indeed what keeps most people coming back to apps like DraftKings. However, while Robins may not pitch a sports lotto or sports slot concept, he and his company have their own way to guide bettors to more lucrative wagers.
At DraftKings, that’s the parlay. On the front page of its sportsbook, bettors will typically find several bonuses or boosts offered that involve multi-bet wagers, especially same-game parlays.
While big parlays, Robins told the virtual Canaccord audience, can increase volatility, “parlays are some of the most profitable bets that you can take.”
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