Sports Betting Expected to Drive Bookmakers to Operate More Like D-T-C Content Businesses

JohnWallStreet

Sports media entities are taking varied approaches to capitalizing on legalized sports gambling. Fox Sports recently announced the formation of a JV with The Stars Group (entitled FoxBet) that will facilitate real-money sports wagering, theScore (in partnership with Darby Development) plans to take bets and issue payouts through their online platform and mobile app and both Bleacher Report and ESPN have struck content based partnerships with Caesars Entertainment. While Fox Sports, theScore, B/R and ESPN are all new to the gaming sector, Minute Media (owner of 90min - one of the three most trafficked soccer sites in the world) has had the experience of publishing in established gaming markets (like the U.K.) for some time. Company president Rich Routman explained that regardless of the monetization model that a publisher ultimately chooses, enticing a sports fan to place a wager “starts with content.”

Howie Long-Short: Minute Media (MM) has found success monetizing legalized sports betting with two distinct strategies. The first is a traditional advertorial or sponsorship based strategy “where MM creates dynamic content in collaboration with the licensee. Native placement. Live odds. All the things one would expect a publisher to do to entice a reader to place a bet on one of its partners’ platforms."

The other is based on MM serving as the engine [providing both the programming and product technology] behind a bookmaker’s content experience (see: FanDuel’s The Duel’). Routman says that “there’s a strong correlation between an end user consuming sports betting related content on a bookmaker’s website and that individual following through with a wager. There’s a lot less friction in getting a reader to place a bet if they're already on the platform, it's much more effective than relying on publishers to drive traffic to a gaming site.” For that reason, Routman believes we’ll see a trend of bookmakers beginning to operate more like direct-to-consumer content businesses.

Routman doesn’t deny that there is an opportunity for publishers to align with licensees and operate sportsbooks (think: FoxBet, theScore) - if the end user is already on their website/app reading about the game, why not allow that individual to place a bet there - but he doesn’t believe that is where “scale comes from. Media companies can drive incremental revenues by enabling betting inside of their existing environments, but when you consider the investments bookmakers are making in advertising and the scale they have in the market - it’s really difficult to compete.”

If bookmakers are going to become content machines and start publishing the best sports betting insights, it’s worth wondering if there’s still a role for the traditional sports media publisher in the space. Routman says that it's not a concern, that “there will always be a role for media companies to cover sports gambling because regular bettors - the ones actively looking for an edge in data and information - only comprise a small segment of the market. Gaming operators are still going to need the scale that media companies can provide.” 

Fan Marino: While sharps crave analysis from all angles, mainstream sports media publishers seeking to capture the attention of the casual sports bettor need to “go wide, rather than deep. It’s about focusing on the fun forms of wagering like prop bets and futures.” Routman estimates that upwards of 80% of the opportunity for media companies is in “bringing the casual fan into the betting space” because the bettor who has been gambling off-shore likely already has sources for all the insights they require.

The opportunity Routman speaks of is relatively limited today as sports betting remains “inherently local." But over time, as deregulation occurs, “every major sportsbook operator is going to be competing for market share in every state with legislation on the books; and the path to market share, starts with media companies with scalable audiences."

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