The launch of ESPN Bet earlier this year has thrown the proverbial cat among the pigeons in the US sports betting world, setting us up for an intriguing 2024.
ESPN Bet, the newly branded online sportsbook operated by Penn Entertainment, went live across 17 US states in November.
Its app was downloaded over a million times within six days of its launch. This was also aided by the busy sports calendar of Thanksgiving week.
The combination of the largest sports media brand in the US and the expertise of Penn Entertainment could threaten to topple the giants of FanDuel and DraftKings.
DraftKings CEO Jason Robins says he is “keeping a close eye” on the ESPN Bet launch. As we also saw in a recent interview with iGB, Mike Morrison, vice-president of ESPN’s sports-betting arm, was delighted with the “really smooth” launch.
“We’re thrilled,” Morrison said. “Everything is working very well. Some of the early reviews we’ve seen are really good. Teams are energised and excited on both sides.”
DraftKings and FanDuel fighting it out at the top
As we’re in early days, the potential of ESPN Bet remains to be seen. DraftKings and FanDuel continue to battle it out at the top of the US sports betting market.
In New York, the US state with the highest sports betting revenue, Flutter Entertainment-owned FanDuel stretched its lead in November. Players spent $923.4m wagering on sports with FanDuel, with revenue reaching $69.2m for the month.
Long-time rival DraftKings, meanwhile, was second with a $723.1m handle and $54.3m in revenue. FanDuel has been the frontrunner in New York for some time. As we’ve seen however, DraftKings had been steadily closing the gap until November.
DraftKings is surprisingly still operating at a net loss. This is despite raising its revenue guidance for the third consecutive quarter in November.
However, DraftKings’ net loss of $283.1m was significantly lower than the $450.5m in Q3 of 2022. Its greater operational efficiency suggests a stronger chance for net profitability for H1 2024.
BetMGM playing catch-up in sports betting
BetMGM recently announced it was expecting to deliver $500.0m (£396.1m/€462.2m) in positive EBITDA by 2026. It also aims to reach 25% market share in the US.
While CEO Adam Greenblatt was optimistic over BetMGM’s Q3 results, Goldman Sachs highlighted the stagnation the operator is currently experiencing.
In its Q3 update, Entain revealed BetMGM held an 18% market share in the US. That is level with Q2, and only marginally ahead of the 17% recorded in Q1.
In New York, BetMGM generated $7.9m in revenue, lagging well behind FanDuel and DraftKings.
Greenblatt is expecting 2024 to be the year BetMGM “unlocks” Las Vegas. He cites the influx of sports events into the city as a key component.
The recent Formula One race in Las Vegas attracted 300,000 fans and was a record-breaking weekend for BetMGM.
The operator took three times the number of bets of any other F1 race in its history. Greenblatt also points to the upcoming Super Bowl in the city in February. This will no doubt be another opportunity for BetMGM to flex its Las Vegas muscles.
Fanatics holding hope for sports betting in 2024
While traditionally falling well behind the likes of DraftKings and FanDuel, new Fanatics Betting and Gaming chief executive Matt King is excited for the challenge of trying to catch up.
Having led FanDuel to the summit of the US sports betting industry as chief executive, King wants to utilise his experiences there to spearhead Fanatics’ rise, though he also believes there are differences.
In an interview with iGB, King said: “It’s working out, how do you adapt a strategy using those lessons? It’s a totally new kind of problem that we’ve been working on. Prior experience is absolutely critical, but it’s not a case of copying and pasting and doing the same thing.”
In June, the Fanatics Betting and Gaming (FBG) arm of Fanatics Holdings agreed to acquire the US operations of PointsBet in a deal valued at $225.0m (£178.4m/€208.1m).
The deal was initially agreed for $150.0m (£118.7m/€138.3m), although the price became much higher after DraftKings threw its hat in the ring with a $195.0m proposal.
Fanatics eventually won the battle and has since rolled out the Fanatics Sportsbook in eight US states, with Colorado the most recent in early December.
The Fanatics Sportsbook also recently became the Connecticut Lottery’s exclusive sports betting partner and is expected to become available in the state in mid-December ahead of what should be an exciting 2024 for the operator.
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