PointsBet led the final wave of sportsbook operators jostling for a hefty slice of New York’s massive sports gambling pie when it took its first bet at 10:09 p.m. Monday.
The question for PointsBet and the three operators that have yet to launch operations in New York is: How much room is left at the table? BetRivers, Caesars, DraftKings and FanDuel each got a head start on seizing market share when they opened operations in New York on Jan. 8. Nine days later, another industry titan, BetMGM, entered the fray.
Now, a week after that, there’s yet another player competing to secure as much of the No. 1 sports betting market in the country as it can. How much of a disadvantage does PointsBet face given potential first-mover advantages for the initial operators?
Hard to say. Some argue that there’s a penalty, for sure, and the longer it takes the remaining operators — Bally Bet, WynnBet and Resorts World — to get up and running, the further behind they could fall. They’re all expected to be taking bets before Super Bowl LVI, however, which is less than three weeks away.
The last wave
It’s not necessarily too late for PointsBet and others to carve out a lucrative niche, experts say. New York has a robust enough population and zeal for sports betting to stretch a long way, it would seem. Though Caesars and others racked up amazing returns in the first days of legal online sports betting, the dynamics of the market could shift in the coming weeks and months.
“The market’s not settled,” said Joe Stauff, a gambling industry analyst at Susquehanna International. “The question, ‘Are you a first mover or not?’ doesn’t get settled in 2 ½ weeks. Are they the first? No, but they’re launching at a similar point all the other operators are. We can argue how long the first-mover advantage is. Is it a couple months? Probably, to really lock in the initial VIP customer segments.”
Stauff sees a nice opportunity for PointsBet to succeed in New York, in part because he thinks Caesars’ problems with its platform, which included more than one outage and some bettors complaining about the company’s customer service, could lead to a dip in its popularity with bettors. He also thinks PointsBet has a differentiated, high-quality product that VIP-level gamblers could seek out.
Early gold rush in New York
Caesars racked up 42.7% of market share in the first nine days in New York, taking in more than $257.6 million in wagers and grossing $22.7 million in revenue. But how much will that change now that Caesars has withdrawn its deposit match of up to $3,000, one of the most attractive promotions ever offered in legal sports gambling?
“Caesars’ execution has been poor and those customers who have locked in the promotion will very much churn after burning through that spending,” Stauff said. “That’s where PointsBet comes into play. It has an excellent online sportsbook and better product offering. There are a lot of things to like about it.”
Such factors become important in holding long-term market share, Stauff said, once the launch promotions start to go away.
The Niners have won six straight over the Rams…
San Francisco +150?🤔pic.twitter.com/SOOyfYFd1b
— PointsBet Sportsbook (@PointsBetUSA) January 25, 2022
PointsBet became NBCUniversal’s official betting partner in August of 2020, the idea being to augment PointsBet’s reach with NBC’s branding power, digital offerings, and extensive sports lineup. BetMGM and Yahoo Sports have similarly teamed up in New York. PointsBet and NBC plan to offer localized programs to engage New York sports audiences, and Hall of Fame-bound quarterback Drew Brees has been enlisted as PointsBet’s brand ambassador.
PointsBet’s innovative “PointsBetting” concept also could help it carve a healthy niche in New York as bettors seek unique wagering opportunities. With PointsBetting, customers betting against the spread establish an amount they’re risking per point. So, if a game has a 3-point spread and the favorite wins by 10, bettors stand to win or lose seven times the amount of their wager. One bettor won $600,000 when the Ravens (as 6-point favorites) defeated the Dolphins 59-10 in 2019.
Thus, Stauff doesn’t expect PointsBet to get crowded out of the New York market, as it did when the heavyweights seized the vast majority of market share in Michigan, Indiana, and New Jersey, three of the nine states in which PointsBet operates. New York is just a different animal, given its size and the savvy of its sports bettors.
“There are going to be a lot more customers up for grabs,” Stauff said.