As the sports betting industry is increasingly becoming crowded with more and more offerings, smaller operators are looking for ways to diversify and separate from the herd.
As states legalize sports betting, major gaming operators like BetMGM, FanDuel, and DraftKings have been making large initial splashes across the country. That is leaving operators like PointsBet and Circa Sports looking for ways to grab market share.
PointsBet, an Australian company that entered the U.S. in 2019, recently signed a partnership with the Detroit Tigers -the first official partnership between a sports betting operator and an MLB team. A focus on baseball will play a significant part in PointsBet strategy moving forward, according to CEO Johnny Aitken.
“Baseball is the sport most ripe for disruption,” Aitken said. “Right now, it’s really just wagering on the run line or money line. We can turn one long game into 700 mini-games.”
PointsBet is currently in three states, Indiana, Iowa, and New Jersey – in New Jersey specifically, the company makes up 6% in the massive market. The company should be in an additional three states by the end of 2020, including Michigan – which is why the partnership with the Tigers was a logical, significant investment, Aitken said.
“We view Michigan as a very important state,” said Aitken. “Detroit, in particular, is a sports-loving city with all the teams in close proximity. We wanted to inject PointsBet into that space.”
Aitken was referring to how the Lions, Pistons, Red Wings, and Tigers all play within a few blocks of each other in downtown Detroit. With an in-house technology team helping keep the PointsBet app nimble, Aitken said making sure they offer a wide variety of localized options in cities like Detroit will be a major way to grow user engagement and its market share.
PointsBet will take a similar strategy to Colorado by the end of the year, where Las Vegas-based Circa Sports has already established roots. Circa Sports founder Derek Stevens said he’s looked to expand outside Nevada, and Colorado’s remote registration system was enticing.
Stephens said Circa’s tagline, “Where the pros play,” sums up the niche he’s looking to fill.
READ MORE: Monkey Knife Fight ‘Aggressively Open For Business’ As it Builds Platform
“We’ll take larger wagers; we’re accustomed to doing that and spending less on marketing than other companies,” Stevens said. “In the long run, the value is our lines.”
Circa will continue to expand to markets where Stevens like the regulations set up, who said the structures in states like Montana and Illinois likely preclude the betting operator from entering the market, because users can’t remotely sign up and deposit.
Stevens, who owns The D Las Vegas and Golden Gate Hotel & Casino, is finishing up constructing a new nearly $1 billion resort project called Circa Resort and Casino located in downtown Las Vegas. Along with its 511 rooms and lavish rooftop pool area with a massive screen for sports viewing, the project will include a multi-level, stadium-style sportsbook. His goal is to make sportsbooks attractive again, he said; he referenced the kind of draw that would take bettors to the Hilton’s sportsbook even if they weren’t staying there. The big footprints that sportsbooks traditionally take up haven’t beat slot machines’ returns and high-rents from the evolving Las Vegas casino ecosystem.
“It’s going to be the Mecca of sports,” Stevens said. “If someone is coming from Kansas City to watch the Chiefs play the Raiders, our thought is they’ll want to stop in, and our book will become an attraction.”
Circa will focus on high stakes bettors and building an attraction while PointsBet will look to build out its localized offerings. As its footprint grows, PointsBet will continue to look at deals like the one with the Tigers. Aitken said they’ve looked at between 20 and 30 deals, but said there needs to be a likemindedness to make them work.
“They are a significant investment, so you need to be sure that investment will be worth it,” he said. “You need to know they’ll go above and beyond. That goes both ways. We don’t want to roll a paper on the outfield fence and call it a day. It’s one thing to do big deals; you have to back it up with a superior product.”
