Sportsbook Stock Investors Betting On Online Casino Expansion In US
The COVID-19 held a small silver lining for sports bettors and gamblers, as casino closures forced many jurisdictions to reconsider legislations limiting or restricting online gambling altogether. The young US regulated sports betting marketplace found itself in a peculiar predicament, with doors closed and little to bet on for those that managed to remain open.
Online gambling restrictions were eased in many locations, and gamblers who had never thought to look for online versions of their favorite games quickly discovered the advantages that existed in the online casino space.
The online world offers customers a much more competitive landscape, and one where casino bonus offerings and free plays are used to entice new customers. Location and overall ambiance are no longer factors to consider when one is able to play their favorite games from the comfort of their couch.
“Like everyone, casino industry workers were concerned about the uncertainty and duration of the lockdowns put in place” shared Eric King, CEO of Zamedia N.V. “With most of our properties online, we were pleased to see traffic surge as casino aficionados showed their willingness to give the digital versions of their favorite games a chance.”
This trend was not limited to North America, however, as King saw similar trends across their global network.
“Traffic increases were global, with our Zamsino and Casinofinder.io products each seeing some of their strongest numbers to date. Even as restrictions have somewhat eased, our data suggests that those who have taken to online casino offerings are relatively pleased and continue to return.”
MORE FOR YOU
“One trend of interest was that we saw similar gains in New Zealand and Australia with our KiwiSlots brand. These areas didn’t experience the same impact felt in outer jurisdictions, but still fell in line with the global shift towards online and mobile gambling offerings.”
US Sports Betting Giants Banking On iGaming Expansion
In this year’s Q1 earning report, DraftKings CEO Jason Robins increased the $39 billion valuation of the total addressable US gambling market to $62 billion. Add in the $5 billion valuation for the emerging Canadian market and this number jumps to $67 billion. This announcement saw DraftKings’ stock prices surge, but also suggested that iGaming could easily trump sports betting in terms of revenue online gaming potential.
In his presentation, this staggering number was broken down to include $22 billion in online sports betting with a potential $40 billion in the form of iGaming revenue.
To clarify, the term “iGaming” most commonly refers to any form of digital wagering. This includes virtual slot machines, casino games, poker rooms, and sports betting. The DraftKings valuation breakdown separates sports betting from other iGaming options to showcase the fact that the real prize lies outside of sports betting.
Looking at a pre-pandemic Nevada casino gaming revenue report from October of 2018, sports betting accounted for less than 3% ($29.5 million) of the $1.062 billion net revenue. Slot machines account for more than half of all earnings, followed by Blackjack with 12%.
Revenue margins associated with sports betting are much lower than those of other casino offerings, and slot machines and blackjack are fast and action packed in ways that give gamblers numerous opportunities to wager. A patron can burn through $100 on the blackjack table in no time, whereas a $100 wager on a football game can keep a bettor occupied for hours.
This same “frequency of wagering” argument also explains why in-game betting is so popular in the more mature European markets. Brands eagerly promote this kind of betting, as players look to rollover their winnings or chase their losses in a race that tends to favor the house.
Partnerships between sportsbook operators and official league data providers are all setting the stage for an improved in-game betting experience for North American sports. Surprising to no one are the partnerships being struck by these same operators with casino technology developers.
With legislators using taxable revenue as a driving factor in their arguments for legalized sports betting, the dollar signs found in the online casino space are simply too large to ignore.