Online sports betting and iGaming have soared in popularity since the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA). The expectation was that land-based casinos would have an advantage over online-only competitors.
However, recent surveys indicate that DraftKings and FanDuel are dominating the market, with customers displaying intense loyalty to these platforms.
According to a survey conducted by J.P. Morgan, DraftKings and FanDuel have emerged as the undisputed leaders in the online sports betting market. The survey, which polled 1,100 sports bettors and online casino players, revealed that 70 percent of respondents prefer one or both of these platforms. This loyalty is reflected in their market share, which aligns closely with the survey results.
The omnichannel gaming thesis is based on the idea of attracting online customers to land-based casinos. Operators such as BetMGM, Caesars Sportsbook, and ESPN Bet have been leveraging this strategy. However, the survey results indicate that consumers display loyalty to their primary platform and often use multiple apps. This challenges the notion that online customers can be seamlessly converted into land-based casino patrons.
Despite the dominance of DraftKings and FanDuel, operators like BetMGM and Caesars Sportsbook have found success by leveraging their land-based casino rewards programs. By allowing iGaming and online sportsbook clients to accrue points that can be used at their casinos, these operators have managed to attract customers to their physical venues. However, recent cybersecurity incidents have raised concerns about the efficacy of this strategy.
Caesars and MGM Resorts International have recently experienced ransomware attacks, which could affect customers’ desire to visit physical casinos. The omnichannel strategy heavily relies on positive in-person experiences, and cybersecurity incidents can deter customers from engaging with land-based casinos.
While iGaming is only permitted in a limited number of states, its customer loyalty trends mirror those of sports betting. DraftKings and BetMGM are competing for the top spot in terms of iGaming market share. However, operators like BetMGM and Caesars have an advantage in cross-marketing land-based casino offerings to their online clients. This provides hope for these operators to attract and retain customers through a combination of online and offline experiences.
Promotional spending varies across states, with higher intensity in states new to sports betting. DraftKings, in particular, leverages promotional offers to foster user loyalty. In existing states, well-known brands benefit from lower promotional intensity, driving stronger user loyalty. The improvement of product offerings and the introduction of new features can further enhance user loyalty across operators. For example, same-game parlay products and better merchandising can entice users to invest sign-up bonuses into parlays, thus increasing engagement and loyalty.
Operators are constantly seeking ways to improve their offerings and attract and retain customers. BetMGM and Caesars Sportsbook are actively seeking feedback from their customers to refine their omnichannel strategies. By listening to the needs and preferences of their user base, operators can adapt and make informed decisions about their future initiatives. This ongoing dialogue with customers is crucial for the success of omnichannel efforts.
