Checkd Group envisages market consolidation and increased innovation in 2024

Road to 2024
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2023 was a mammoth year for US sports betting, with two new operators entering the market, over $2bn being wagered in New York in one month alone and key states like Ohio and Massachusetts launching regulated online betting markets. 

As the industry welcomes in the new year, there is much anticipation about what 2024 will bring. Undoubtedly competition for the top spots in state markets will intensify as ESPN BET and Fanatics ramp up their operations. 

However, there is a risk of continued market stagnation that was witnessed in 2023. The speed of states legalizing sports betting has slowed significantly from 2022 and before and 2024 could yield similar results. 

While question marks are on the industry’s 2024 fortunes, the new year is an opportune time to make some predictions. 

Here, Callum Broxton, Head of US Operations at Checkd Group, outlines his top three predictions for the US sports betting industry for the year ahead. 

The inevitable consolidation and drop-off of US operator numbers

With the likes of ESPN and Fanatics looking to have the brand strength and marketing ambition to dominate the US in the near future, I’d expect to see a consolidation of the mid-tier operators and the unfortunate withdrawal of a number of smaller operators who have failed to back up their punchy ambitions with a full foot in the door.

The fact that two legacy brands have launched simultaneously may also have required a rethink at bet365 as they ramp up their rollout. A new level of aggression looks to be required to compete for that early market share in terms of both market entry and setting their stall out against big name incumbent operators.

The average US bettor is still navigating a dynamic betting ecosystem, having been bombarded with new betting propositions of late. As evidenced on our FlashPicks app, many are still forming their own betting habits and investment in it as a pastime—and until these behaviors become more settled and LTVs better known, the industry will have to play the waiting game until a new wave of expansion becomes realistic.

Tighter regulation could be the death knell for DFS in certain US states

Daily fantasy sports has long lost its crown as the number one ‘betting’ vertical in the US, but that’s not to say it doesn’t still support a significant, if not, waning following. Unfortunately for many of these proponents, legislators look to be forming consensus in their approach to dealing with it in its current outlying status as a game of skill.

The general view, perhaps informed by a greater understanding of betting regulation post-PASPA, is that – at least for the vast majority – DFS activity tends to rely purely on hunch and luck, as opposed to pronounced skill. I empathize with those in disagreement that can back it up with years of profitable fantasy action, but it looks to be a losing battle with legislators looking to take what’s arguably the ‘safer’ path to unpicking its ‘skill-based’ status and bringing it in line with other more traditional betting verticals. As it is outlawed on a state-by-state basis, it’s possible that DFS will go back into the gray market, but its market share looks set to decrease.

US product and martech acceleration after a steady 2023

2023 has been fairly static in terms of the introduction of game-changing product developments for sports betting, with US operator strategy reasonably prioritizing the lock-in of their core audiences. Looking at more mature gambling market progressions, this low level of activity is likely just the quiet before the storm.

Major players should be looking to pick proven practices from the golden DFS era and across the pond to loosen up their core sports betting offerings. In the UK, the Sky Super6 has been a significant success, and this could be one that both ESPN and Fanatics may look to unpack with their own IP and brand-heft. Who is best set to succeed here is hard to say. ESPN’s brand loyalty seems a better fit, but the prior relationship with SkyBet that sits within Fanatics’ executive team may position them as the more agile and willing of the two to fully leverage these new sportsbook complements.

Either way, 2024 is set to bring a new look to US sports betting, with in-house IP leveraged by tier-one operators into brand-heavy products, while smaller operators may look to go down the tried-and-tested third-party supplier routes proven elsewhere.