EKG LINE: THERE'S A NEW NUMBER ONE APP...
A weekly newsletter with gambling industry insider insights from the Sports Betting & Emerging Verticals team at Eilers & Krejcik Gaming
1. THERE'S A NEW SHERIFF IN TOWN
There's a new number one app in our 2H24 OSB app rankings. More on that below, plus three other key takeaways from our latest round of app testing.
DraftKings knocked FanDuel off the top spot for the first time in two-and-a-half years.
What changed? DraftKings’ Same Game Parlay functionality scored higher and testers loved the player props and flash bets available on the platform. Coupled that with faster loading and bet processing times.
Besides DraftKings, the big winner of the testing round was Fanatics, which jumped three spots in the rankings to third.
Fanatics’ Betting Interface score improved, but the biggest change was in Features, where cash out and SGP availability appear to have expanded, garnering a sizable score increase from our testers.
On the downside, bet365 was a relative faller, slipping two spots to number five. But the slippage seems to have been sparked by their recent UX overhaul. We suspect these issues may be temporary, as customers often take time to adjust to new looks.
Elsewhere, BetMGM languished in ninth, thanks to ongoing speed issues. BetMGM’s speed and loading times are a foregone conclusion at this point, and considering it has been a consistent issue for more than three years, it feels repetitive to keep bringing it up. But, yet again, it is the single greatest issue our testers see with the app.
If it were ever properly fixed, we would be talking about BetMGM in the same breath as DraftKings and FanDuel, because our testers do like the features, market depth, and account page on the app.
2. PODCAST: HOW DRAFTKINGS BECAME OUR NEW TOP APP
Host Brad Allen is joined by EKG product testers Jimmy Neilly and Danny McCarthy to discuss the 2H24 OSB app rankings, including:
How Prime Sports fared in its debut testing round
How DraftKings pipped FanDuel
Why BetMGM slipped to the bottom half of the top 10
Listen to the episode here.
TRENDING UP/TRENDING DOWN
Trending up: Poker. Poker continues to enjoy a mini-revival in the U.S., with Rush Street Interactive this week launching the BetRivers Poker platform in Pennsylvania. The product is built on top of the Run it Once Poker site RSI acquired back in 2022. PokerPro’s Nick Jones noted that it wasn't “an Electric Poker-style single game in the [DraftKings] casino,” but rather “full online poker.”
Trending down: Tax contagion. That is at least according to RSI CEO Richard Schwartz who said last week at 3Q results he didn't expect other states to copy Illinois’ tax increase. “Protecting consumers is a goal, Schwartz said. “Governments raising taxes on regulated operators like us really just simply drives more volumes at unregulated sites like the Sweepstakes casinos where no one benefits.”
4. MISSOURI JOINS THE OSB PARTY
Missouri voters legalized sports betting on Tuesday, approving Amendment 2 by the barest of margins with 50.1% support. Our quick thoughts on the market below.
Attractive TAM. We project a Year 5 OSB market of $548mm in GGR, implying GGR-per-adult of ~$121. We see TAM as large enough, and fees / taxes as reasonable enough, to attract large and mid-sized operators, as well as smaller operators. Toward that end, there will be 21 online licenses.
Attractive taxes and fees. License fees are low ($500k initial fee, 5-year term). Moreover, using some reasonable assumptions regarding tax-deductible items (e.g., promotional credits, uncollectible receivables, federal excise taxes), we get to an effective OSB GGR tax rate of ~5.8% across Years 1-5. That’s well below the national average (~21%).
Winners. FanDuel and DraftKings are likely, in our view, to get the state’s two online-only licenses. Assuming that’s the case, the very low effective GGR tax, together with the absence of market access cost (i.e., no NGR sharing with casino or sports team partners), could make Missouri one of the highest-margin OSB-only markets for both operators.
Great insight - lots of other nice things happening for online poker in America right now w/ interstate liquidity and more operators taking investing in poker in the USA seriously.