Proof of the pricing pudding
Competition on price is becoming keener in US OSB
Price competition increasingly evident across sports.
In +More: Musburger buys back VSiN, Evoke’s continued share slide.
JMP on the latest iCasino market shares.
FanDuel running ahead of estimates for NGR growth in Q2.
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Competing on price
Dog eat dog: Pricing within the US OSB space is becoming increasingly competitive, suggesting the recent M&A activity in the areas of pricing and trading is feeding through to the offerings in the market. According to data from pricing analytics firm HoldCrunch, the differentials between pre-game and in-play propositions are particularly fierce.
Recall, previous data from the firm suggested there was room for Tier 2 operators to compete with the top two in the market.
Now the data suggests this is happening at the level of individual sports and between the pre-game and in-play pricing.
Recent deals include Caesars’ acquisition of Australian-based micro-betting provider ZeroFlucs, Entain’s acquisition of Angstrom, DraftKings’ deal for Sports IQ and Fanatics’ purchase of Pointsbet US, which included the Banach Technology outfit.
“Even where these charts imply sportsbooks are similar on price, there are often differences when looking by sport as well as pre-game vs in-game,” says HoldCrunch’s Tom Johnson.
He notes that Fanatics has the “widest variance” in recent months, being very competitive with its NBA pricing, especially in-play, but at the same time being the least competitive in MLB. Meanwhile, Caesars is the opposite, with a less competitive offering in-game in NBA and a far more competitive one in MLB.
“FanDuel, DraftKings, BetMGM and ESPN Bet tend to occupy more of the center ground across sports, although they too lead in different segments,” Johnson adds.
He cites FanDuel being the most competitive pre-game moneyline in MLB, whereas ESPN Bet edges others when looking across all MLB markets, and DraftKings and ESPN Bet are “neck and neck the most competitive” in college basketball.
“The per sport view is significant because we have identified particular distances on price that correlate to handle share movement,” Johnson adds.
The big picture: Zooming out, HoldCrunch finds FanDuel remains the keenest on price, but that ESPN Bet and BetMGM have recently inserted themselves in second and third spot respectively, with DraftKings in fourth.
Fanatics, which made a bid for pricing supremacy earlier in the year, has fallen back to fifth spot recently, while Caesars appears to have given up on price as a competitive tool altogether.
But, as Truist notes when looking at the HoldCrunch data, this might change following the acquisition of pricing specialist ZeroFlucs.
🏁 The race for top spot by price – the pricing landscape Q223-Q224
Data: HoldCrunch
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+More
Want you back: Musburger Media has announced it has bought back the Vegas Sports Information Network (VSiN) sports-betting media business, which it originally sold to DraftKings for $70m in March 2021. The terms of the purchase were not disclosed but as was reported by EKG, which broke the news earlier this month, it is likely the sale price was nominal.
As E+M reported, the divestment on the part of DraftKings once again casts doubt over hopes of a convergence between sports betting and sports media.
“While a lot has changed in the sports-betting industry over the past three-and-a-half years, our original vision for VSiN still holds and we are committed to delivering the most credible, independent information and analysis sports bettors can find anywhere,” Brian Musburger said in a statement.
For its part, DraftKings’ CMO Stephanie Sherman said it would “continue to optimize” its investments in content and media.
Evoke: Having issued a profit warning last Thursday, Evoke has continued to see its share price tumble, with the shares close to having lost a quarter of their value as of close on Monday. The shares have shipped 19p since the warning or ~£76m.
💥 Evoke can’t stop the slide
A warm welcome: In comparison, Gavin Isaacs appointment at rival Entain was warmly welcomed by the market, with the shares receiving a 5% boost in the day and up a further 1% in early trading this morning.
The analysts at Investec said yesterday that the appointment of a permanent CEO was “always going to be a key catalyst” for the company.
Bet365 has received approval from the Pennsylvania Gaming Control Board to launch its mobile sportsbook and online casino in the state via a partnership with Churchill Downs’ Presque Isle Downs & Casino property. Bet365 is now live in 11 states.
Gaming Innovation Group has signed a second deal for backend provision in the UK, with Betzone the latest operator on the books following the agreement earlier this month with The Football Pools.
iCasino market shares
Same as it ever was: Stasis ruled supreme for iCasino market shares in Q2, according to data compiled by the analysts at JMP, who pulled together the numbers from the four states to have reported to date.
Looking at the data from New Jersey, Michigan, Connecticut and Delaware, the figures show DraftKings and FanDuel continued to share the lead with a combined 52%.
Behind them came BetMGM in a solid third with 21%.
Then the picture fractures a bit more, with Caesars on 7%, Rush Street on 5%, ESPN Bet on 2% and the others with 12%.
Bottoms up: The team at JMP noted that BetMGM’s market share “appears to have bottomed” YTD at ~21%, which they suggested was an “encouraging sign for the company as it took a step back to invest in the business following the market share decline starting in late 2022.”
Also noteworthy is Caesars 7% share – actually 7.3% in June – which comes after the company expanded its reach with a multiple brand strategy, notably in Michigan.
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FanDuel Q2 tracker
Pressing home the advantage: Pulling together data from 18 OSB states to have reported Q2 numbers and five iCasino states, the team at Jefferies showed market leader FanDuel is ahead of forecasts for market growth at an NGR level.
The tracker currently predicts overall growth of 35% vs. consensus estimates of 25% and Jefferies own previous estimates of 28%.
As Jefferies said, particularly in relation to the consensus among analysts, the tracker figure is “meaningfully ahead.”
🔥 FanDuel ahead of estimates for Q2
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Calendar
Jui 24: Kambi, Churchill Downs (e)
Jul 25: Churchill Downs (call), GLP (e), Boyd Gaming
Jul 26: GLP (call)
Jul 30: IGT, Red Rock, Caesars Entertainment
Jul 31: MGM Resorts, Rush Street
Aug 1: DraftKings (earnings)
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