Long read: How the biggest US operators are using marketing to take market share

“It’s just so different here,” says Johnny Aitken, US CEO of Australian gambling giant PointsBet. He is referring to the US sports betting market in America, which exploded onto the roadmaps of the world’s top-tier gambling operators back in May 2018, when the Supreme Court repealed its federal ban on sports betting. A marketing war has been waged in the country ever since.

“You think about Australia and your marketing dollar touches just about every corner of the country where you’re live with your brand,” says Aitken. “Not to say that marketing is easy in either Australia or Europe but it is a lot more straightforward. With the US, you need to look at what states you’re live in, as well as the forecast for when a big state like Texas, Florida or California might come online. All those states seem a long way away so doing national TV deals would mean a huge amount of spillage. It is very tricky and I think that actually plays into our favour given our ability to be nimble,” he adds.

PointsBet invested heavily in putting a large team on the ground in the US from mid-2018, which Aitken believes gave the operator a competitive edge over its European rivals that were perhaps slower to set up camp stateside. He describes it as a key advantage and derides those firms who would rather run their operations from “the mothership” in Europe.

Aitken also concedes that while the US is a totally different beast to markets elsewhere in the world, there are learnings that can be taken from more mature territories, like Australia, for example. Australian punters are in his words “obsessed” with US sports, which creates a clear advantage for PointsBet over European-focused firms where customers are arguably on more of a learning curve.

PointsBet is one of the top five brands in New Jersey with more than 5% of online market share for sports betting, much of which Aitken attributes to the operator’s marketing strategy – for which CMO Rick Martira is responsible. Martira never previously worked in sports betting but has just celebrated his one-year anniversary with PointsBet. “We don’t have to re-wire somebody who has come from a European betting market and think he or she has the playbook,” says Aitken, who describes Martira as a “needle mover”. “Rick has a different perspective which has complemented the learnings the rest of us have from the Australian market and that blend has worked really well. It is such an important part of the business,” he adds.

FanDuel has closer to 50% of the market when online and retail are combined, and this landgrab is largely down to the DFS giant’s relentless marketing activity, especially in New Jersey.

Lifestyles of the rich and famous

We have seen what happens in Europe when gambling firms turn the marketing material up full blast. The tide turns and the industry is vilified by the public and the media, while legislators can also step in with an ultimate blackout ban as happened in Italy. This might explain why US heritage DFS firms like FanDuel and DraftKings are especially keen to portray themselves as lifestyle brands rather than just sports betting outfits.

FanDuel CMO Mike Raffensperger says: “When thinking about the American marketplace, this is still very new. I think some of our competitors are taking a path that is overly-transactional with sports. We must remember this is still a form of entertainment. We want to be approachable to recreational bettors and sports fans, and I think we try really hard to be that lifestyle brand. Instead of just inundating people with promotions, we want to be additive to the sports fan experience,” he adds.

FanDuel CMO Mike Raffensperger

New market entrants from Europe must differentiate themselves from the illegal offshore operators that have previously made a killing in the US. FanDuel and DraftKings have the advantage of legacy, having become well-established DFS brands in the American sports market over the last decade. So, how does their marketing strategy differ from those newcomers to the market?

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“I’m not going to pontificate on Unibet’s marketing strategy,” says Raffensperger. “I think it’s just harder for them. They need to create the distinction that they’re not one of these offshore guys because to an American it’s hard to know, especially if you don’t have that brand recognition. Some of the European firms coming over and competing in the regulated market still think of themselves as gambling companies.” He adds: “They create functionality, marketing, product and pricing as gambling companies and, while obviously we operate gambling platforms, we really think of ourselves more as a sports entertainment technology company.”

DraftKings paints itself in the same light. CMO Tom Goedde, a former marketing executive with the Madden NFL video game franchise, told Ad Age that DraftKings wants to reposition itself with its future marketing campaigns as not just a betting website but a lifestyle brand. The operator’s latest ads are an attempt at “cultivating an emotional connection to the brand that has not been prioritised in the past”, he says. “It’s about eventually bringing this around as a lifestyle brand and less of transactional experience,” he adds, echoing his counterpart Raffensperger.

FanDuel’s New York office

Education, education, education

A huge proportion of US marketing material must go on educating potential US sports bettors. Whether they are trying to recruit a digital-savvy 21-year-old fresh out of college, or a 50-year-old die-hard NASCAR fan, operators must draw attention to the legitimacy of their businesses, as well as highlighting the range of shiny new products on offer like in-play betting, for example.

Raffensperger believes the legalisation of US sports betting has forced FanDuel to do two things. The first is to displace the black and grey market activity that was taking place pre-PASPA. He says: “We must educate the marketplace on the material ways that legal sports betting is better. We offer many more things to bet on and we have live and in-play betting, which at this point is 40-50% of our overall turnover, so it is very popular and something the offshore guys cannot do.

“You also have the assurance that you will get your money out. You can withdraw in as little as 24 hours as opposed to some offshore books where maybe you’ve got to do some cryptocurrency thing or wait weeks for a cheque – and that’s if you can get it out at all before they close up shop and abscond with your money.”

PointsBet’s Aitken is also keen to drive home the in-play advantage. Americans don’t need sports betting as a concept explained to them. As a sports-mad nation, there was an estimated $150bn bet on sports in the US every year, even before PASPA was repealed. The task now is to promote the advantages of legalised, legitimate betting to tap into that lucrative pirate market. “There is a big education still to be done around in-play betting,” says Aitken. “Traditionally you’ve got a section of the market betting offshore and I’d say more of their bets are on pre-match. Then you’ve got the old-style bettor, who for 10 or 20 years has been betting with the guy down the street, placing bets before a game. We had to raise awareness that you can keep betting once the game starts and you will see a lot more messaging around in-play, which has obviously been immensely successful in Australia and Europe.” He concludes confidently: “I think that will be the case here as well, and we see in-play being 90% or more of our handle within the next three years.”

But is the lure of in-play entertainment enough to tempt offshore bettors back into the light? “It’s hard to know exactly how much of our business is cold out of the black market, just because the nature of the black market is hard to measure,” says FanDuel’s Raffensperger. “But we’re very confident that a tremendous amount of early market activity we’ve had is being pulled from those offshore places.” While it might be difficult to measure, there are some figures that suggest Raffensperger is on the right track. Looking back on the first gameweek of the 2019 NFL season, FanDuel betting activity in New Jersey increased sevenfold year-on-year. “We’re in the early innings but the signs have been very promising,” he adds.

Football and free-to-play

Talk of the NFL is topical and the importance of the nation’s favourite competition to the bottom line of US bookmakers should not be understated. Raffensperger describes it as the “800-pound gorilla in the room”, while his competitor Goedde likens the day before the season kicks off to the gambling industry’s Black Friday. Goedde told Ad Age’s Marketer’s Brief podcast: “It is our clear number one. It drives the vast majority of the $2bn in pay-outs that we’ve actually already had this year.”

Raffensperger agrees, adding: “The NFL counts more than 100 million Americans as fans and so there’s not really a point of the year as important as the first week of football for acquiring new customers into our sportsbook. As for how we market the sportsbook, we are leveraging a brand under FanDuel that has been in the American marketplace for 10 years, is incredibly well known and trusted, and endemic to the idea of games about sports for real-money,” he adds.

FanDuel recruited Jerome Bettis, one of the most successful running backs of all time, as one of its NFL brand ambassadors ahead of the big kick off. Bettis played for the Pittsburgh Steelers between 1996 and 2005 so has huge reach in Pennsylvania – a market FanDuel has newly entered.

Brand ambassadorship isn’t the only tried and tested marketing method being used by the biggest operators in the US to help maximise market share and recruit new customers. The free-to-play (F2P) industry is also booming across the pond as it gives would-be sports bettors a taste of vertical without having to part with their hard-earned cash. If the user experience is a good one, the hope is that they sign up for an account and become a fully-fledged depositing customer.

“I think free-to-play is a really nice way to educate people and get them comfortable with your brand,” says Aitken. “They can have some skin in the game without any real finances or a deposit at stake, so it is a nice way of getting people comfortable with sports betting.”

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While the consensus seems to be that US firms shouldn’t look to their European counterparts for a sports betting blueprint, FanDuel did borrow its F2P initiative from Paddy Power, with both companies falling under the Flutter Entertainment umbrella. The DFS giant gave Paddy Power’s popular Beat The Drop game a makeover and relaunched it in the States as Keep The Cash.

“We are big believers in free-to-play games,” says Raffensperger. “I am looking to create a recreational, big-tent, approachable sports brand, both in our fantasy business and in our sportsbook business and I honestly think free-to-play is an important pillar of doing that.”

Different horses for different courses

Gambling operators will not maximise their potential reach without the use of affiliate marketing and this is as true in the US as in any other market. EGR Marketing has heard horror stories about the use of affiliates in America, including tales of one man stood outside Walmart offering store credit vouchers to unsuspecting pensioners in exchange for their customer sign-up details. Europe’s familiar rev-share model is also hard to come by so CPA deals make up the bulk of the activity. This explains why Gambling.com Group getting the rev-share green light from New Jersey regulators back in April was a big deal.

Aitken says: “In Europe and Australia, you typically pay affiliates purely off a revenue share model whereas here there’s a licensing process for an affiliate to go live in any state of the US. They have to go for a vendor licence and the process to get a rev share deal is a lot more intrusive to the affiliate, so many affiliates here only have the capability to charge CPA. This is very dangerous ground for operators because affiliates in this scenario aren’t motivated to bring you valuable clients. It is just about volume,” he adds.

Aitken suggests PointsBet works with select partners in a few states but that his preferred approach for winning black-market punters is to highlight the operator’s aggressive pricing and superior product, while FanDuel’s Raffensperger, on the other hand, hailed his firm’s relationship with affiliate partners, albeit on basic CPA deals.

“We have a whole network of affiliate partners across a variety of tiers that we work with on a CPA basis,” he says. “They’re incredibly important and great partners of ours and it is a productive relationship. I think they’ve recognised the strength of our brand and the way it has resonated in the marketplace.” He adds: “Rev-share is very limited to be frank because there aren’t so many partners willing to go through the regulatory process, as it’s much more challenging and more onerous.”

Affiliates, brand ambassadors, free-to-play and TV advertising. None of these firms are reinventing the wheel. It all seems so familiar but the stakes feel so much higher in the US. This is a market that is far from settled but its nascent nature could be about to change if the CMA ticks off the mega-merger between Flutter Entertainment and The Stars Group, creating an American betting behemoth to include Raffensperger’s FanDuel and one of its biggest rivals in Fox Bet.

The others – including DraftKings and PointsBet – will have to bring their marketing A-games to remain relevant.