Entain CEO Jette Nygaard-Andersen has outlined that the Angstrom Sports acquisition will help to boost the BetMGM venture across US sports wagering states and help it reach its target 20-25% market share.
Speaking to investors early this morning following the publication of H1 interim results, Nygaard-Andersen stated that the closure of the deal will conclude later this year, but that work has begun to launch a new player prop product later this week. The initiative will be followed by a full product launch, and expected additions ahead of the Super Bowl and March Madness in 2024.
The CEO explained that the deal ensures that Entain is the only international operator to have a full end-to-end online sports betting offering, needed to bolster pricing on parlays and in-play betting for US sports whilst improving bottom line margins from US wagering.
She explained: “In this case simulation, risk analysis and pricing around more complex products such as parlays and in-play products, which are more recreational customer-type products.
“This is a highly strategic move in accelerating our US strategy and we are excited to be bringing key capabilities in-house making us the only operator with full end-to-end capabilities for risk analysis and pricing across all forms of sports betting products. It also accelerates our ability to offer more tailored and personalized products for customers while optimizing margins through risk management and pricing.
“We’re already working with the team ahead of completing the acquisition to accelerate the rollout of new products in us and we believe it will become a key differentiator for us with this enhanced analytics and pricing coupled with single account single wallet, we are ideally positioned to drive BetMGM forward and deliver on our target market share of 20 to 25%.”
These comments came in the wake of MGM Resorts CEO Bill Hornbuckle’s comments last week, when he criticized the BetMGM platform. Hornbuckle explained that improvements were required on the sportsbook side of the app.
Entain management put some flesh on the bones of the improvements that Angstrom Sports will help to make on the platform, noting that the pricing models will improve, particularly on complex high-margin products such as in-game parlays.
“Angstrom’s approach to forecasting and pricing is going to allow us to produce a broader and more exciting product for the customer. So the approach to pricing will allow us to redefine both in-plays, but also single-game parlays.
“We believe that we’ll be able to become a market leader in this area. So Angstrom is unique in terms of its predictive capabilities, the simulation is based on play-by-play levels, so not to be generating sports betting markets and pricing based on historic data.”
BetMGM reinforced what MGM Resorts stated about BetMGM’s H1 performance, which was reported last week. You can read our coverage of this here.
Noise in Latin America
Via its acquisition of 365Scores, Entain has aimed to be a top player in Brazil following regulation, but analysts questioned how the group would navigate an incredibly competitive marketplace, which will only intensify when the market does eventually open.
Entain’s CEO conceded that there is undoubtedly “a lot of noise” not just in Brazil, but Latin America as a whole.
“We are still very much optimistic in terms of the sale coming online beginning of next year,” she told analysts. “Now what we’ve done, and what you see in the trading numbers, is that actives continue to grow.
“However, we reset our marketing approach during H1, with a focus on improving ROI, and also a more sustainable customer base. But that curve should now start to turn in each not least with the integration that we’re doing with 365Scores, which is going really well.”
Reality bites for ESPN Bet & Fanatics prospects
The US market was rocked this week when it was revealed that PENN entered a $1.5bn licensing deal with ESPN to launch ‘ESPN Bet’ later this year. Ditching Barstool Sports as its wagering and media partner in the process, PENN aims to gain 20-25% market share by 2027, the same target as Entain to become US market’s disruptor.
Twinned with the anticipated rollout of Fanatics Sportsbook, which recently acquired PointsBet for $225m, there is an outlook of increased competition for market share in the US.
Yet, Nygaard-Andersen shrugged off the ambitions of challengers, noting that there has been significant consolidation in the US, as the landscape toughens for new entrants to challenge the established top three operators.
“The market is becoming more and more consolidated. The top three players now have 79% market share and it’s been sitting around that level for several years now,” she observed.
“So it’s becoming more and more difficult to build a meaningful market share if you want to build a sustainable business with profits. No one has successfully been building plus 10% market share from behind.
“The reason for that is that we see more and more that it’s all about technology and product, and having an organization with experience and muscle to continue to invest in and improve your technology and product capabilities. So while it’s exciting what’s going on, this is not going to change the trajectory for BetMGM.”
No complacency on casino threats
Whilst BetMGM still maintains a 27% online casino market share across the six regulated states, industry onlookers have observed the share gains that DraftKings and FanDuel have made in the last 12 months.
This caused some concern in the investors’ call over complacency on BetMGM’s behalf when it comes to online casino leadership. Yet management fiercely defended against those accusations, explaining that, despite sustained market share leadership, BetMGM is not resting upon its laurels to maintain growth in US i-casino markets.
In fact, Entain stated, the firm is always updating its product to ensure that it stays ahead of the competition and leverages its Entain platform capabilities and competencies to do gain advantages over competitors.
“We know that we have competition, but we never focus on one competitor and when I look at the numbers for igaming market share, I take comfort in the fact that it’s actually been pretty stable.”
“The last many months where we’re seeing more competition come into the market. And we assured you’re not standing still. You’ve seen that we’ve launched a number of new products, whether it’s games, exclusive games, or the big new lotteries that we are launching.
“So market share is stable, we are not standing still, but we are not focused on any competitor here.”