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BettorOff CEO Alex Dubin: What’s next for US online sports betting?

BettorOff CEO Alex Dubin explores the future of legal online sports betting in the US as the vertical heads toward its five-year anniversary.

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With the five-year anniversary of legal sports wagering in the US approaching, the sports betting community finds itself at an inflection point. Last year saw the demise of multiple smaller online sportsbooks, as the realities of the cost to compete in the user-acquisition wars became too steep.

Although this year will likely see much of the same, with industry giants including FanDuel, DraftKings, BetMGM and Caesars continuing to try and outspend one another for control of the massive online betting handle, we should also expect 2023 to bring some changes to the online sports betting landscape.

Sportsbooks will begin to focus on profitability

Since PASPA’s repeal, sportsbooks have dedicated millions of dollars to the pursuit of two words: user acquisition. Pegging the average lifetime value (LTV) of a US online sports bettor to something in the neighbourhood of $2,500, the books have been more than willing to shell out seemingly endless sums to third-party operators in the form of affiliate deals, resulting in an average customer acquisition cost (CAC) of more than $370.

Sportsbooks support this spend as a short-term expenditure that will pay heavy dividends in the long run. And while the books will doubtless continue this high-priced land grab, 2023 could see the beginning of a shift in focus – from sheer volume to a user-acquisition strategy accounting for profitability of the users they acquire.

It is important to note this shift does not necessarily mean lower profits for affiliate partners. What it may mean is that sportsbooks’ profit margins will start to correlate more closely to the CACs the books are willing to pay to third-party platforms. The prospect of these outsized affiliate payouts has spawned myriad companies whose business models centre on driving bulk sign-ups to the books, whether those users are actual sports bettors or not. And while sportsbooks have largely looked the other way, they are beginning to crack down on these affiliates by lowering CAC payouts or even ending the relationships entirely if the value of the users they drive is too low.

What determines the value of a user to a sportsbook? Exactly what you would think: how much do they bet once they sign up? The platforms and services that deliver high-value players will continue their enormous profitability, while the bulk sign-up shops will begin to fall by the wayside.

Bettors will demand more

As the sports betting market in the US continues to expand and mature, so too will the sophistication and demands of bettors. Just as Facebook was eventually not specialised enough for professionals, spawning LinkedIn, such will be the fate of #gamblingtwitter. Although Twitter has been an acceptable social platform for sports bettors in the past, we are seeing the sports betting community demand more.

More what? More curated content, more specialised features that enhance and streamline the sports betting experience, and more trust and transparency in whom bettors follow, especially when money is exchanged for expertise.

In a survey BettorOff commissioned ahead of the recent FIFA World Cup, more than 55% of adult sports fans said they trust handicappers “very little,” with more than 65% stating they would be interested in a platform that verifies picks and results. These data suggest more than a popular mistrust of information acquired through Twitter. They indicate an evolution of sports bettors’ expectations when it comes to social betting.

As the sports betting market in the US continues to expand and mature, so too will the sophistication and demands of bettors

A new era of experts will emerge in social betting

Conversations around sharing picks, debating matchups, bragging on victories and lamenting losses have become as much a part of sports betting as the books, the lines and the games themselves. Moving forward, how these conversations happen and what they’re based on will matter even more – because as much as betting on sports is an exciting way to enhance the experience of watching a game, the entertainment value goes only as far as your bank account allows.

Entertainment will start to be met with expertise. While boisterous touts and talking heads will remain popular, the insights of those who really know sports betting will continue to gain value and traction within the betting community. It has become clear that those engaged want authenticity and substance over bluster and exaggeration. Progress in these areas will turn sports betting into an even more interactive, exciting and rewarding experience.

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