The rivalry is fierce among Pennsylvania online casinos. Operators are constantly collaborating with emerging businesses or creating in-house games in order to provide the finest content for users. Despite being one of the leading operators in Pennsylvania, BetMGM PA Casino recorded a modest decline in online casino share of the market in Q2.
BetMGM appears to be following in the footsteps of its competitor, DraftKings, by investing in cross-sell prospects from sportsbook players.
BetMGM Estimates a Small Decrease in Market Share for Online Casinos
Estimating BetMGM’s online casino share of the market in Pennsylvania takes a lot of work. Revenue is broken out by license by the Pennsylvania Gaming Control Board (PGCB). BetMGM operates under the Hollywood Penn National license, which also includes its main competitor, DraftKings PA Casino, as well as Hollywood, PointsBet, and Barstool.
The Hollywood license generates the highest money in the state. Through June 2023, the collection of providers generated $426.1 million. Rivers Casino Philadelphia, along with BetRivers, Borgata, and SugarHouse, earned $209.4 million in revenue last year.
BetMGM was the undisputed leader in the online gambling space in August 2022, with a 31% market share. According to the brand’s Q2 slide deck, its share has dropped to 27%.
Because numerous online casinos share a license, it’s challenging to determine BetMGM’s exact market share loss in Pennsylvania. Having said that, it is not a leap to state that DraftKings is Pennsylvania’s leading online gambling operator.
On a broader scale, BetMGM CEO Bill Hornbuckle cited cannibalization as a factor for the decline. For the second quarter of 2023, BetMGM published the following statistics for its regional casino operations:
- Casino revenue: -7%
- Table games: -14%
- Slot handle: -5%
According to Hornbuckle:
“I believe that once we have more of this omnichannel in play, we can start motivating people to go back to the property tier with tournaments and additional activity cases that will drive people over into brick and mortar.”
BetMGM has no locations in Pennsylvania, although the retail and internet casino sectors appear to be declining.
Through the Angstrom Agreement, BetMGM will Enhance its Product
DraftKings has often stated that it offers the most excellent product on the market.
“The product is far better this year than it was last year.” And, as I mentioned before, I believe we’ll have the best product in the industry by the end of the year,” DraftKings CEO Jason Robins said during his Q2 2023 earnings call.
As Robins claimed last week, the product is part of the reason for DraftKings’ success in cross-selling. According to Hornbuckle, BetMGM’s product might use some improvement. He stated:
“To be honest, it’s back to what I said previously. Our product is not where we would like it to be.”
To counteract this, BetMGM’s partner, Entain, entered into an agreement with Angstrom Sports, an expert provider of next-generation sports modeling, forecasting, and data analytics. Angstrom will develop cutting-edge pricing and forecasting skills.
“I believe the moves we’re making now with Entain, our partner, and the moves we’ll make with Angstrom, our newly onboarded partner for BetMGM, will lead us to a point where we’ll be back in that game in a significant manner and hopefully begin to regain some share.”
Hornbuckle intends to reclaim online casino market share with the sports-focused collaboration.
BetMGM will use Angstrom to Implement Cross-Sell Techniques
While DraftKings claims to have the most fantastic product, it also profits from sportsbook users who go to the online casino. It contributed to the company’s 88% year-over-year sales growth.
“It’s kind of like this halo effect where when you maintain better and cross more people towards the NBA on the sports side, that then causes a spill-over effect on iGaming,” Robins explained.
BetMGM appears to be using a cross-sell tactic as well. BetMGM will likely be able to cross-sell effectively with a superior offering, thanks to Angstrom.
“It’s just sports bettors on the casino side.” Around 30% of them travel to the casino. If you take that out of the equation, it’s part of the reason iGaming has dropped a couple of points, but we still dominate. We are not stupid to believe that they will not pursue us in that venue.”
Hornbuckle is correct. BetMGM dominates the online casino business, yet there is still potential for improvement. Both statements are possible. Because BetMGM is still in a favorable position, it shouldn’t take long for them to regain control.