Okay, we’ve been at this long enough so that we know the lay of the online sports betting-iCasino landscape.
Forget all of the news releases announcing new markets and sports sponsorships ranging from teams to star players to venues.
The fact is we now know the leaders – month after month, season after season, jurisdiction after jurisdiction, all of the noise and headlines aside.
Flutter’s FanDuel is clearly first in revenue share, followed by MGM and Entain’s BetMGM and DraftKings.
There is a second tier of fast risers: Caesars, then Penn National and Rush Street Interactive.
There are differences from market to market and in sports betting and iGaming in those markets, and there are smaller players making relatively big splashes in some places, like PointsBet in Michigan. And there will continue to be more announcements promising transformational events.
But the fact is that the Big Three are the Big Three, with Caesars growing to perhaps make it a Big Four at some point.
Here are July’s rounded-off revenue shares from Fantini’s U.S. online sports betting and iGaming report:
Flutter 34 percent
Bet MGM 22
DraftKings 22
Caesars 7
Rush Street 5
Penn National 3
The rest in the U.S.: a combined 7 percent
As enthusiasts for small cap growth stocks, we will not discount the value of searching for rising stars among the smaller players. And we’ll certainly follow companies that serve the industry: data companies such as SportRadar and Genius Sports, affiliates similar to Catena and Better Collective, and games platform providers like Bragg Gaming.
But for many investors, the game is among the big players, which means the six listed above.
And for companies in the space, the time has come to switch discussion from promises to profitability, or at least credible paths to profitability in a reasonable time.
We are now just several weeks away from third quarter earnings releases. This will be the time for executives on their quarterly investor calls to show tangible progress toward profitability.
And It Might Not Be The Pure Players…
…that are the best bets in this new digital wagering world.
Caesars, Penn National and MGM have strong brick-and-mortar businesses to provide support and stability. Flutter has a big United Kingdom betting business to provide support, as well as Boyd Gaming, owner of 5 percent of the U.S. gaming network.
How well these brick-and-mortar operations are aiding online ambitions—and not cannibalizing physical business—is another area that should interest investors.
Along those lines, Deutsche Bank gaming analyst Carlo Santarelli has done another of his studies that provide data-supported insights into digital gaming trends.
He finds that, while iGaming has grown overall gross gaming revenues, and while it should become a profitable segment, the overall impact on individual operators varies considerably. Further, based on his analysis of the largest and most mature iGaming markets—New Jersey, Pennsylvania and Michigan—there has been some cannibalization of brick-and-mortar businesses.
In summation, online sports betting and iGaming now have fairly long track records to help investors make decisions and the data is a lot more complex than the loud and blithe market share predictions too many company executives have gotten away with making.
