The fight for market share in the US sports betting space

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How can smaller brands hope to fight for market share in a state such as New Jersey? Scott Longley of Clear Concise Media, citing the views of some of the industry’s leading figures, finds that the route to success goes through both product and offering and delivers the best chance of establishing a niche. 

The early evidence from September onwards suggests the marketing blitz that accompanied the early weeks of the new season is having an effect.

Certainly, when it comes to the revenue data from New Jersey, where handle topped $1bn for the first time, the extent of the blizzard of promotions appears to have ignited even further interest from the punters.

But what does the success of the brands at the top of the market in generating business do for those lower down the market, not just in New Jersey but also in other states?

“Competition is a good thing,” said Dr Laila Mintas, US CEO of PlayUp, a new entrant in the New Jersey market which launched just this month, October.

“It’s obviously good for the punters because they get to choose between some great offerings and, right now, some very good promotional offers.”

But she added that a tough competitive environment also brings out the best in all the operators working in any given market.

“Entering a red-hot market like New Jersey means you have to really have honed your product offering to ensure you have something that the customers are going to want. That means you need a USP which can help you stand out.”

Who shouts loudest?

Given the money that the biggest operators are spending right now, the route of trying to shout the loudest about any offering has likely been closed off. 

As was suggested by PointsBet’s CEO Sam Swanell just this week, brands not at the very apex of the market can’t afford to “get caught up in the arm’s race” of marketing and will necessarily have to look at other routes to grab the attention of the customer.

One route identified by PointsBet and others is a differentiated product.

“We certainly don’t try to compete with many others on bonuses and promotions, which are often unnecessarily confusing for customers,” offered Pascal Lemesre, head of PR for Smarkets in the US.

“In the long run, the huge acquisition costs some operators are paying isn’t very sustainable. We simply want to offer a fair, easy-to-use product that provides bettors with the value they deserve.”

Angles of attack

Dr Mintas agrees that simply trying to even keep up with the spending of the largest operators is not a viable option “unless you have the deepest pockets imaginable”.

Instead, she asserts that PlayUp is relying on grabbing a share based on best pricing. “It seems odd to say it, perhaps, but we still think there is an audience in New Jersey and elsewhere that isn’t yet really being catered to and that is the price-sensitive punter,” she said.

Lemesre agrees, suggesting that the company’s SBK offering in Colorado is trying something similar. “With the exchange, we have built a platform unlike any other in betting with a world-class user interface featuring the best price visualizations’ in the market,” he noted.

“All the years of hard work on the exchange now underpins what we are trying to do with SBK, a sportsbook app powered by Smarkets with industry-leading odds and unique social features.”

At the races

Pricing is one thing but PlayUp also has another very specific product offering that it believes can help it grab more than just a foothold in New Jersey and that is fixed-odds horse racing wagering.

New Jersey became the first state to regulate the product back in late summer and PlayUp has already partnered up with Betmakers Technology, the sole provider of New Jersey fixed odds horse racing betting, to launch with the product.

“We think there is a huge overlap between the kind of ‘sharp’ customer we are aiming at and fixed-odds horse racing wagering,” said Dr Mintas. “This is certainly the case in both Australia and the UK, and we think this will become increasingly evident in New Jersey.”

PlayUp does have one last card up its sleeve – an official sponsorship deal with the New Jersey Devils in Newark, the only professional sports team in New Jersey.

“It gives us visibility with our target audience,” she added. “Sponsorship deals such as these are very localized and can be a very cost-efficient way to reach the customer.”

This is the aim for all the challenger brands in whichever state they are operating in – reaching the customer in such a way that it doesn’t cost multi-millions in advertising and promotions. It isn’t easy, particularly in New Jersey where the competition is quite so intense.

But as they say just across the Hudson River from the Devils, if you can make it there…