Gambling on the Growth of US Online Sports Betting

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Gambling has always been about the flycatcher. Use shine to get customers in the door, free drinks to get them seated, and then loyalty perks to get them to tables with higher minimums.

Why it matters: A version of the flypaper effect is now taking place in the gambling industry itself, which is experiencing a major wave of consolidation.

  • Online content drives people to online sports betting, which then leads them to online interactive games that have higher margins and often partner with physical casinos for co-branding or white-label opportunities. And this also includes online ad tracking, which enables operators to carry out retargeting and significantly increase conversion rates.

Driving the news: CNBC yesterday reported that DraftKings had offered to buy Enttain, the listed British sports betting company that owns Ladbrokes and Coral, for $ 20 billion. Enttain later confirmed that it had received a takeover bid from DraftKings but did not provide any further details.

  • A source familiar with the situation says DraftKings made its offer for nearly $ 20 billion more than two months ago and there were no counter-offers.
  • This would be DraftKings’ largest acquisition to date, but it has been active. As recently as this year, it bought Golden Nugget online casino for $ 1.5 billion in shares, sports betting video content company VSiN for what Axios hears is around $ 100 million and is reportedly among the Applying for a $ 3 billion trademark licensing agreement with ESPN.
  • Entain has bankers drawing on a previous $ 11 billion takeover bid that it rejected by MGM Resorts, with which it has a U.S. online sports betting partnership called BetMGM.

Big picture: The gaming company’s M&A hit an all-time high in 2021 CrunchBase, and just last week we saw a massive IPO of SportRadar, a data technology provider for sports betting companies.

The bottom line: This is about the expected growth in US online sports betting as more states legalize and bettors become more comfortable. Both DraftKings and MGM see advantages here for Entain, which mainly operates in the mature European market. In other words, we’re still in the early innings.


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