Coming soon to your neighborhood …
At the time of this writing, there are 20 states and Washington, D.C., that have legalized sports betting. By the time this is published, there may be more. What is it that makes the game so much more interesting when there is a monetary result riding on the outcome? It’s the money! It is the reason that you sit on the edge of your seat with 27 seconds left in the game, the score 27-10 and no chance that the other team wins. It’s to cover the spread. As amazing as it seems, it was only in Nevada where you could legally place that bet until 2018.
Now everyone wants to be part of the action. Casinos, racetracks, professional sports leagues, TV networks, prognosticators, states, even bars. When you look to partner with a retail or online provider, what will your priorities be? Here are five things to consider when you are looking to put a sports book in your casino.
What do you know about the companies that you are considering? Not only is their reputation important to them, but it is important to you, because now if something goes wrong, it is a reflection on your property because your name is on the front door. How long have they been in business? Where are they located, and who have they been in business with? Have they ever experienced any legal action against themselves and if so, how has it been resolved? Are they already working with a competitor of yours, and who takes precedence?
There are numerous companies out there, many from outside the United States trying to get a slice of the pie. It’s not that this is a bad thing, but be careful to do your due diligence in checking them out. Are their products built for the U.S. bettor (not as easy as it sounds)? Have they operated in grey or black markets? Do their promises seem outlandish, and will they be able to keep them when not everything goes the way it’s expected? If it’s too good to be true, it probably is.
Reliability & Support
As much as anything, you want a system that functions. One that is stable, up and running with minimal downtime. If there are problems, what do they have for a customer support team to get it up and running? When your guests have problems, who do they contact and where are they located, and can you visit and take a look? Today’s online and mobile offerings are a result of industry consolidations, legacy technologies being re-appropriated or disparate technologies and services bolted together. Make sure that this technology is current and state-of-the-art, while also being continuously upgraded for the U.S. markets. If your state allows for mobile, that technology is even greater at accommodating the demand for volume of speed to accommodate the amount of transactions.
The ability to start building the database early is critical. A product that helps achieve the end goal of building a high-quality database, while reinforcing your casino brand. Providing entertainment value to the consumer, staying engaged and driving increased visitation to your property with prizes won online, but redeemable at your casino with the use of social casinos or play for fun solutions. In some cases, these products are built on the same platforms as their real money offerings and even offer sports betting for fun. This makes the transition to real money online gaming even simpler when online sports wagering is approved in your jurisdiction.
Having a partner for sports wagering should not only be a concern about how their benefit is being served. A partner should also be concerned with how their product is benefitting the casino as a whole. Is table game revenue up, food and beverage profits increased, hotel stays up and more slot play, and are you able to track this? It must be a mechanism that is contributing to the overall performance of the property.
Although sports wagering has only been available in the U.S. for a short period of time, look at who is performing well. Once again, as many new suitors are out in the sports wagering arena, it is hard to distinguish who is doing well. Look at the numbers. Those that are consistently strong in volume, that are showing growth and that are showing strong innovation and the ability to sustain that are companies that you should consider. Be careful of those promising unrealistic projections and throwing money at solutions, which cannot be done forever. There are many models that although volume is good, they may not be profitable with the ongoing expenses that are built into the business model.
What about acquisition and retention? How do you acquire a player more efficiently? Once you get them, how do you retain them more effectively? As with any solutions, they must be sustainable for the long haul.
Regardless of whom you choose for a partner, their products should fit with your forward-looking strategy beyond retail. This is only the beginning. Will their platform allow you the vertical growth required beyond just retail sports to online wagering, mobile, in-game wagering, slots, tables and social, and do it effectively? Do they have the innovation looking forward to develop these products and technology that will be required to deliver on the promises of today five and 10 years down the road?
All of these are questions that you will have to weigh carefully in deciding who you want to partner with. One thing for certain is that it is not going away. Looking at the early wagering in some of the first newly legal states, they are only growing bigger. The big events this fall and winter have been huge. The reality will be that if you don’t have it, someone else will.