An executive involved in pushing BetMGM made a big splash Wednesday about the brand’s future prospects in the US online gambling market.
And Roar Digital, the MGM Resorts International and GVC joint venture, put its money where Kenny Alexander’s mouth was.
“Other people have the ammunition to really go and grab market share, and we’ve put this investment in as a sign the kid gloves are coming off,” Alexander said, according to Legal Sports Report. “Our aspiration to be the market leader is very real.”
To prove it, Michigan would be a nice first step.
BetMGM punching up to DraftKings, FanDuel
Alexander’s comments came during a funding announcement from Roar.
The $250 million injection, along with Alexander punching up to market leader DraftKings, signaled BetMGM is willing to get in the game. The new capital infusion brought Roar’s total investment to $450 million for its US sports betting and online casino operations.
Alexander said BetMGM aspires to beat the online gambling market leader, aiming to overtake DraftKings and FanDuel within five years.
If [competitors] are going to be spending a few times more than us, then they either have to be absolutely useless or we have to be absolute geniuses to come out on top. I’m pretty sure we’re not geniuses and they are not useless. So we are going to have to go toe-to-toe on the level of marketing investment.
Michigan fertile for betting market, BetMGM share
The Roar investment indicated the company is on track to operate in 11 states by the end of 2020.
Michigan is already one of those states, where MGM Grand Detroit opened its BetMGM Sportsbook on March 11 in downtown Detroit.
Later that night, NBA play was suspended. Five days later, MGM Grand was closed because of the coronavirus.
Early Michigan sports bets solid for BetMGM
Still, the early betting returns were positive.
In those five days of retail sports betting in Detroit, MGM took in more than $485,000 in handle, an 82% market share for the three casinos.
There are several factors to keep in mind there:
- Of course, it’s an extremely small sample size
- MGM had the most robust opening celebration on March 11, drawing more of a crowd with a handful of Detroit athletes such as Thomas “The Hitman” Hearns and Jerome Bettis
- MotorCity Casino opened its FanDuel Sportsbook on March 12, and only had four days of sports betting. That was a crucial day to miss in this sample, as more and more sports were suspended after MotorCity joined the fray.
Still, there are other Michigan numbers that can leave BetMGM optimistic. Michiganians are familiar with the brand, as MGM Grand is the state’s favored downtown gaming destination.
MGM Grand is the busiest of Michigan’s 26 casinos. In 2019, MGM Grand earned more than $623 million in revenue, or 43% of Detroit’s three-casino market.
FanDuel, DraftKings the favorites to lead the market
Still, it’s an uphill climb for BetMGM in online gambling, a market that will dwarf retail sports betting.
The MGM name recognition is nice, but DraftKings and FanDuel have spent years aggressively marketing their brands for daily fantasy sports platforms on Michigan televised sporting events.
DraftKings and FanDuel combined for $1.4 million in DFS revenue for January 2020 in Michigan. Compare that to about $105,000 of revenue from the five days of sports betting in Detroit’s three casinos.
FanDuel has been No. 1 in the New Jersey online gambling market. DraftKings leads in Indiana, a Michigan neighbor.
In both states, BetMGM’s numbers are not even close.
So far in 2020 in New Jersey, BetMGM is running about 5%, according to LSR.
GVC CFO Rob Wood said Wednesday the leaders’ share for online sports betting will ultimately be a percentage in the 20s.
That’s a long ways away for BetMGM.
PointsBet made aggressive move last week
Not only is BetMGM trying to chase down DraftKings and FanDuel, but they aren’t alone in the pursuit.
BetMGM is among a cluster of potential competitors, a group scurrying for the best way forward to the top tier.
PointsBet threw up a tentpole in Michigan last week, announcing the first sportsbook partnership with an MLB team, the lowly but beloved Detroit Tigers.
Michigan is a key state for the Australian company. Michigan will be PointsBet’s first online casino launch and first Native American tribal partnership.
BetMGM trying to separate from the pack
In addition, Golden Nugget will scoop some sports bettors with its online casino brand, which leads in New Jersey.
William Hill is here, as are potential strong local tribal brands in Soaring Eagle and FireKeepers. Those casinos have spent marketing dollars across the state for years.
And what about Fox Bet? The Flutter brand could be thrown into the faces of the state’s NFL football bettors hoping to drown their Sunday sorrows after another Detroit Lions loss, watched live by millions each week on FOX.
Plus, maybe the wildcard of wildcards could be a sleeping giant: Penn National Gaming hopes “Stoolies” come strong, as its partner Barstool plans to launch an online sportsbook in Michigan.
How can BetMGM bust through in Michigan?
BetMGM has several different ways to make a serious dent in the Michigan market.
On Wednesday, executives touted their strong positions in four core tenets:
- Market access
- Customer reach
- Product and technology
The company announced Thursday a BetMGM-branded lounge will open at Denver Broncos games. Maybe Ford Field could see a similar setup.
There is also an untapped market of local pitchmen. How about Detroit sports radio king Mike Valenti, who dominates afternoon ratings on 97.1 The Ticket?
With that station in Entercom hell and his Always Aggravated Podcast a potential life raft, could he want an escape from or a supplement to the topsy-turvy radio grind?
Would a university like Michigan or Michigan State try to help cure their athletic department budgeting ills with a sportsbook union?
There are plenty of different partnerships to be had in a state where fans could look to sports gambling. Maybe they can get some wins that the home teams haven’t been able to deliver.
In the Great Lakes State, BetMGM hopes to reel them in.