BetMGM CEO Adam Greenblatt believes that the operator can see off competition from the likes of ESPN BET and Fanatics as the US sports betting market enters the next stage of its development.
Greenblatt addressed investors and delegates at the Bank of America Gaming & Lodging Conference, at which he was quizzed about some of the new entrants to the market. He asserted that, while he respects all new brands, BetMGM will have more than enough to ride the storm that could ensue, and claimed that there is a big four group of operators.
Notably, he pointed towards the strength of the BetMGM product compared to the ESPN BET/Barstool Sportsbook experience, stating that user experience is the core driver of holding onto and gaining market share.
He stated: “I think players will always experiment. My expectation is that ESPN BET will launch and get a tonne of samplers, but the player and the product experience is the same as it is today. The impact of that player experience is visible. I’m happy to compete against that.”
Greenblatt, who has long held a bullish view on BetMGM’s long-term prospects against challenger brands and smaller firms, elaborated on his thoughts, asserting that the experience that his brand as well as FanDuel and DraftKings have amassed in the last few years will make it even tougher for new brands.
The MGM and Entain joint venture has made improvements to its sportsbook product recently through the £200m acquisition of Angstrom Sports, whilst Greenblatt noted that further improvements to the online casino will come soon, too.
These improvements, he stated, will set it apart from new entrants.
“Frankly, the rotation has been towards more formidable groups. Having said that, our sector is hard and shouldn’t be underestimated and to gain meaningful ground against the incumbents, I think will be extremely challenging.
“I have great respect for all of those organizations like bet365 and ESPN, great respect for them, but we are doing the business and they are not. Until you are, we can speculate as much as we want as to how they make meaningful ground on the leaders who have been at this for five years.”
Meanwhile, Fanatics Betting & Gaming CEO Matt King has been doing the media rounds recently. He spoke to CNBC about the recent full launch of the Fanatics Sportsbook and PointsBet: A Fanatics Experience platforms.
King made the bold claim that Fanatics would be the fastest operator to reach profitability from launch, owing to its effective unit margin and 95 million-strong customer database.
“We think we’ll reach profitability faster than anybody else in the industry. So, they’ll get there first but we started later. So when you look at how long we were in the period of being unprofitable, it’ll be the shortest in the industry.”
With the large customer database that Fanatics has made a lot of fanfare about since launching, and the strong margin that it anticipates having, CNBC was eager to ask about how the firm will approach promotional credit and bonuses.
King explained that, with its jersey giveaway, Fanatics is undertaking one of the industry’s biggest giveaways, but that the topic of promotions has been a key strategic debate ahead of launching.
“That’s an ongoing debate internally,” King stated. “So for us, our model is very different. We’re actually acquiring users at about 80% less than the competition because we already have a database, and we already have a well-known brand.
“Therefore, our unit economics are phenomenal and we’re acquiring users at scale. From our perspective, what we’re trying to do is invest more in the rewards program back to users, as opposed to spending all of our money upfront to acquire them, like the incumbent.”
Meanwhile, Greenblatt also addressed the promo question, having been one of the first to reduce marketing spend. The CEO noted that BetMGM will always be disciplined in its approach to marketing.
“We’ve always been disciplined about managing the ROI, that’s just the way we are in managing our investment in above-line spending. We’ve had a very strong base from the beginning to be short-term flexible and move to where the player values are. So high conversion rate, high player value, low CPA, that’s the Holy Grail.”