Smaller Tribal Operators Must Play To Strengths To Maximize Sports-Betting Opportunity

April 26, 2022
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While sports betting in the U.S. to date has been dominated by major players such as FanDuel, DraftKings and BetMGM, dozens of operators including domestic and internationally-based commercial operators and local tribal casinos are looking for ways to stand out from the crowd.

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While sports betting in the U.S. to date has been dominated by major players such as FanDuel, DraftKings and BetMGM, dozens of operators including domestic and internationally-based commercial operators and local tribal casinos are looking for ways to stand out from the crowd.

One common theme expressed by gaming industry executives and consultants last week during the Indian Gaming Tradeshow in Anaheim was to play to existing strengths rather than try to match the brute force spending of the larger operators.

“It's easy to get noticed when you just spend ungodly amounts of money to acquire players with what really just seems like a complete disregard for profits,” said Rob Leitkes, vice president of North American sports betting for GAN.

“But I do think that there's a huge opportunity for smaller operators or any operator for that matter to be recognized in the market especially when it comes to retail sports betting,” Leitkes said.

Haig Sakouyan, vice president of customer success for Strive Gaming, added that with investors starting to seek profitability on sports betting, operators can be “laser-focused.”

“They're not going to be able to go head-to-head and spend the big dollars, but they have assets that can be leveraged; databases, properties,” he said. “A lot of these large national players aren't very interested in driving people from online to offline, but when you have that offline presence, you can leverage it to teach folks how to sports bet.”

“You really have to look for gaps,” added gaming consultant David Sargeant. “You have to look for partnerships that are cost effective, you have to look at your own database and how do you build it.

“If you're not in a legal market yet, you should be anticipating the arrival, and you shouldn't be waiting for DraftKings to turn up; you should be building your database today.”

Sargeant also pointed out that the goals can be different for each operator, with some pursuing competitive market share, while others could simply be protecting their existing gaming interests and driving customers back to the land-based property.

“It may be a loss leader in some situations, but I do think that you don't have to have 10, 15, 20 percent market share to be profitable,” Leitkes added. “You can be profitable with, you know, 1 to 2 percent market share.

“Obviously a lot of it is operators saying look, I want to I value my brand, I spent all this time developing it. I want to now take that to the next level to a digital brand, and I want to continue to expand on all the work that I've put into this point.”

Where the panelists disagreed was on the subject of sharing customer databases with partners.

Sargeant argued that if done correctly, both sides of a market-access partnership can benefit from sharing databases.

“There are very successful online and retail propositions utilizing each other's databases to drive traffic both ways,” he said. “When your patron leaves the casino, you want them to still engage with products that you make money from.

“But also try to make sure your online partner is also doing the same for you … so it's a two-way relationship.”

Leitkes pointed out that one of the downsides of sharing player information is that if a smaller casino or tribal operator gives up database access for sports betting, that company who is a partner now could ultimately become a competitor when online casino is permitted in the jurisdiction.

“One of the many questions you have to kind of ask yourself, choosing a partner and choosing which way and which path to go down, as to what do I want, do I want to maintain my player database what I've spent all this time and all these resources building? Do I want to have ultimate control over it or not?” he said.

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