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September 14, 2018

Online sportsbooks in New Jersey get aggressive in quest to acquire customers

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Eagles NFL season opened Linc Eric Hartline/USA TODAY Sports

A general view of Lincoln Financial Field during pregame ceremony honoring the Super Bowl Champion Philadelphia Eagles against the Atlanta Falcons on Sept. 6, 2018. The Eagles unveiled a banner in the stadium, commemorating their championship win in Super Bowl LII and won the game 18-12.

Online sports betting is humming in New Jersey. We are not even through Week 2 of the NFL season and there are already eight sports betting sites live and ready to take your bets, this after a summer where casinos and sportsbooks raced to bring their apps to the marketplace following the Supreme Court’s decision to overturn a 1992 law which effectively banned sports betting everywhere but Nevada. 

While Pennsylvania is still seemingly months away from offering legal sports bets online, NJ is setting the tone for how this shift in sports gaming and monetary engagement will go. On one side of the coin, you have the major players, DraftKings and FanDuel, bringing to market compelling, superior products— while on the other, casinos have released their own perfunctory apps that get the job done but without a lot of (read: any) ingenuity or consideration. 

In the middle is where the real battle is, however. International players with experience building mobile-first products are competing hard to challenge DraftKings and FanDuel. While the latter have excellent user interfaces, they are new to the betting market and lack the expertise of handling a wide-range of deposit methods or understanding which promos move the needle for all-important customer acquisition. 

The international sites, like 888sport and BetStars, both of which launched this week in New Jersey, have the advantage of running successful sportsbook overseas and in working with US casinos to offer online poker and casino games. 

Take for example these two differing strategies: FanDuel planted its foot down two weeks ago with a slick app that is, in my opinion, the best of the bunch so far. Their signup bonus: a $100 deposit match to new users, which sounds like a lot until you consider that BetStars is offering $500 in free bets and insane 100-1 odds on any team to win the Super Bowl.

That means you can get the Eagles, popularly around 9-1 to win it all, at a 10x value. There are of course restrictions with all of these promos - expensive “free” bets require a close reading of the fine print, and you can only wager up to $5 on the Super Bowl odds - but you get the point: the international sportsbooks are coming out swinging against the popular US brands. And they have to. 

New Jersey released figures from August comprised of just a few weeks of online sports betting, and the numbers are quite staggering. Licensed sportsbooks took in over $21 million in bets, most of it with just DraftKings, which launched in full on August 6, until PlayMGM and SugarHouse launched apps later in the month. DraftKings, through their partnership with Resorts, took in almost $3 million. 

Compare that to the roughly $100k SugarHouse and its partner, Golden Nugget, brought in and the nearly $50k the Borgata, through the PlayMGM app, counted, and you see why sites like BetStars have to offer aggressive promos. If you’re wondering why those numbers don’t add up to $21 million, that’s because the larger figure is “total handle,” or the amount wagered, which includes future events whose bets are unsettled. 

And here’s the fun part: DraftKings and SugarHouse offer essentially the same action. Both are powered by Kambi (which also powers 888sport), who sets the prices and odds. So it really comes down to brand recognition and user experience. Or to be more specific, interface, since one could argue the experience with SugarHouse was better in August as they offered many more deposit options than DraftKings, which had some issues in the beginning. 

That’s why the international sites are so intriguing— because they get that it’s partly about branding and promotion, something they’ve excelled at in Europe. Besides 888sport and BetStars, several other international sportsbook plan to enter the fray in New Jersey. 

PointsBet, a young Australian company that has from Day 1 focused on popular US sports like basketball in anticipation of legal sports betting here, have partnerships with licensed operators in New Jersey and New York and have said they’ll bring their promising spread betting system to the US by the end of the year. 

Similarly, bet365, a major European sportsbook, has partnered with Hard Rock Casino to offer sports betting at some point in the future. It’s clear from the early going that the traditional casino players will be no match for DraftKings and FanDuel— their brand recognition, customer base, and financial backing is just too large to compete with. One source told me up to 30% of the workforce at DraftKings is technology employees. 

Viewed through that lens, you see why it’s hard for traditional casinos to compete with them in a marketplace that exists largely through mobile apps. But the European and other international sportsbooks are a different story. They already have the mobile thing down. And they know how to brand themselves. 

My bet is that one or two of them wind up closer to DraftKings than MGM in terms of revenue. To stay updated on sports betting in New Jersey, you can visit our NJ online sports betting page for the latest on available sites and promo codes.

For more on sports betting, check out CrossingBroad.com.

KYLE SCOTT, CROSSING BROAD