Sports Betting Drive Gaming Growth

One of the most challenging things for gaming companies is engaging customers when they’re not in a casino. Marketing emails are often the most contact a gaming company has with customers when they’re away. 

Sports betting could change customers’ engagement with gaming companies, particularly if online betting spreads. Customers could make mobile bets on their casino accounts from anywhere in a state, and gaming companies will likely expand their betting options now that gambling is legal for a wider audience. 

Overseas gambling may be a model for the industry in the U.S. In the U.K., gamblers can bet on much more than traditional sports results, like who wins a game, the line, or over/under total score. They can bet on how many shots a player will take in a basketball game, who will score the first touchdown of a football game, or how many touches a player gets in a soccer game. Increased betting options are possible simply because there are more people gambling and casinos have the data to make these bets possible. It’s data that drove MGM’s deal with the NBA, where it sees a lot of potential for increased engagement with customers. 

Sports betting is also about boosting the overall volume of wagers for casinos. If there’s very little volume, it doesn’t make sense to take complex bets or even make your own odds for a game. But if volume increases, it makes financial sense to buy data and hire oddsmakers for the sports book. It’ll snowball as more people start betting on sports. 

Keep in mind that illegal sports betting is already a big business today outside of casinos. Bets on sports total around $150 billion each year according to the American Gaming Association, but it’s mostly underground. Some of this betting will move from bookies to legal casinos in states that open up for sports betting, effectively shifting volume from illegal locations to legal ones. 

The other area to look at is service providers who build the betting infrastructure for powering MGM’s sports betting already, and Scientific Games announced an agreement with Caesars to use its sports betting platform in New Jersey and Mississippi. They’re in the early phases of building out sport betting businesses, and will likely be providers for most early casino sportsbooks. These companies have a lot of potential upside if sports betting takes off as casinos hope. 

MGM is the largest casino operator in the U.S., generating over $4 billion in revenue from just its Las Vegas resorts. But it also operates the Bellagio in Atlantic City and earlier this year purchased Empire Casino in New York, and that could result in significant advantages for it as it positions the gaming company in the midst of two massive sports markets, New York City and Philadelphia.

Benjamin Franklin once described New Jersey as a keg tapped at two ends, but that plays well when it comes to sports gambling as MGM’s casinos can benefit from some of the biggest franchises in all of sports. Of course, the New York Yankees are arguably the richest prize in baseball, but the New York Mets and Philadelphia Phillies are valuable league assets as well, and being able to potentially partner with any of these teams could be a lucrative proposition.

In addition to MGM being able to promote its brands and gaming options across MLB’s broadcast and digital platforms throughout the season, each baseball team plays 162 games a year, more than any other sport. Then there’s the All-Star Game that MGM will have access to, as well as the World Series.

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