Sports betting in the Midwest in 2020 felt like a jockey finally guiding their jittery horse into its starting gate, only to watch another competitor false start and make you begin the process again.
If you hadn’t already launched operations in 2019, like Iowa and Indiana did, then the spring of 2020 and the onset of the coronavirus pandemic created a bizarre stop-and-start waiting game, like it did in Illinois and Michigan. Or, in the case of Colorado, you damn the torpedoes, proceeded full-steam ahead and come out the wiser with a online-focused approach from Day 1 that has resulted in a $200 million-plus handle in the most recent report.
But in many walks of life, including on the sports wagering front, 2021 hopes to bring less volatility and a full go at what is a booming sector of business in the region.
That’s certainly the opinion of Jason Scott, the vice president of trading for BetMGM, which looks to be launching its online sportsbook platforms in both Iowa and Michigan next month and has Midwest operations already up and running in Colorado, Indiana and Tennessee. He also said the company hopes to launch in Illinois in the second half of 2021. Throughout 2020, however, Scott said he saw the quarantine consequences that affected many Americans’ leisure activities as unintended boons for the industry once sports in America were up and running again by late summer.
ðŸ—£ï¸ Hey Pennsylvania! which looks to be launching its online sportsbook platforms in both Iowa and Michigan next month and has Midwest operations already up and running in Colorado, Indiana and Tennessee. He also said the company hopes to launch in Illinois in the second half of 2021. Throughout 2020, however, Scott said he saw the quarantine consequences that affected many Americans’ leisure activities as unintended boons for the industry once sports in America were up and running again by late summer.
BetMGM is officially live in the Keystone State. Welcome to the show!
— BetMGM (@BetMGM) December 18, 2020
“People who were lucky enough to not lose their sources of income were not spending their disposable dollars on vacations, cars or theme parks or those entertainment sources,” he said. “They’ve been time-rich as well, due to a certain level of quarantine in many areas, so one of the big winners has been online sports and casinos. This situation has certainly contributed to some of the growth.”
But where will growth be biggest in the region in 2021? When factoring sheer population, the gross revenues from states such as Michigan (where online wagering will at last be approved in January) and Illinois (which took a pandemic-affected approach that toggled in-person registration requirements on and off through the year) will be difficult to ignore. Scott pointed, out, however, that market penetration from other companies with daily fantasy footprints, such as DraftKings and FanDuel, could require a greater volume of dollars to be spent per customer in bigger states to earn their business. So, in terms of profit margins, or bang for your buck, each state brings its own pros and cons to the table.
Indiana, for example, spent all of 2020 in a full operations mode and saw its annual handle eclipse $1.2 billion, with roughly 80% of that total coming from mobile wagers. Iowa, even with requirements of having to register in-person at a casino to wager, has seen handle records broken in successive months, with November surpassing $87.1 million in wagers in a state of just 3.16 million people.
“It all has to be surgical and considered,” Scott said. “You can’t simply go to a one-size-fits-all blueprint. In Michigan, for us, we own the MGM Grand Detroit, and so we can focus around that and know we have a customer base there.
“In Iowa, we’ll go a bit differently, spend money intelligent in a mixture of doing it digitally and on TV and radio. Because of all of those variables, I don’t think you can say that one state is more important than other.
“I think the big operators are going to want to be in every state (that has legal sports wagering), because the cheapest way to do advertising is nationally, and it’s difficult to accomplish when focusing on a pocket of just six or seven states.”
And as more states get added into the wagering fold, the data and the strategies for long-term success can become clearer, Scott said. Even clearer than the reality that the American sports betting boom is still in the back half of its early stages.
“I tell anybody — because we have tripled in staff size as we have added new states and because we employ some folks from outside the (United States) — you have to understand the nuance,” said Scott., a native of Australia. “I’ve told a couple of people to forget what we think we know, and let the data tell us what American customers want. Challenge yourself and question what you see.”