The competition among Pennsylvania online casinos is fierce. Operators are consistently partnering with new companies or developing in-house games to release the best content possible for players. Though BetMGM PA Casino is one of the top operators in the Keystone State, it reported a slight loss in online casino market share in Q2.
BetMGM appears to be taking a page out of its competitors’ book, DraftKings, to start investing in cross-sell opportunities from sportsbook players.
BetMGM reports slight online casino market share loss
It’s near impossible to determine BetMGM’s online casino market share in Pennsylvania. The Pennsylvania Gaming Control Board (PGCB) breaks down revenue by license. BetMGM is under the Hollywood Penn National license with its biggest competitor, DraftKings PA Casino, along with Hollywood, PointsBet and Barstool.
The Hollywood license produces the most revenue in the state. The collection of operators generated $426.1 million through June 2023. Rivers Casino Philadelphia, partners with BetRivers, Borgata and SugarHouse, recorded $209.4 million in yearly revenue.
In August 2022, BetMGM was the clear leader in the online casino space, reporting, roughly, a 31% market share. According to its Q2 slide deck, the brand’s share has dipped to 27%.
With multiple online casinos sharing a license, it’s difficult to tell the true loss in market share for BetMGM in Pennsylvania. Having said that, it wouldn’t be a stretch to say that DraftKings is the top online casino operator in the Keystone State.
On a more national level, BetMGM CEO, Bill Hornbuckle, mentioned cannibalization as a reason for the decline. BetMGM reported the following metrics for its year-over-year regional casino operations for Q2 2023:
Casino revenue: -7%
Table games: -14%
Slot handle: -5%
“I think once we get more of this omnichannel in play, we can begin to motivate
back into the property level with tournaments and other activity case that’ll drive people
back into brick and mortar.”
BetMGM does not have any properties in Pennsylvania, however, both the retail and online casino sectors have appeared to drop off.
BetMGM to upgrade product through Angstrom deal
DraftKings has made it abundantly clear that it has the best product in the market.
“The product is so much better year-over-year from where it was last year. And as I said earlier, I feel like in the back half of the year, we’re going to have the best product in the market,” DraftKings CEO, Jason Robins, said during his Q2 2023 earnings call.
Part of the reason for DraftKings’ success in cross-selling is the product, as Robins boasted last week. To Hornbuckle’s admission, BetMGM’s product could use some work. He said:
“Candidly, it’s back to what I said earlier. Our product is not where we want it to be.”
To combat that, BetMGM’s partner, Entain, struck a deal with Angstrom Sports, a specialist provider of next generation sports modeling, forecasting and data analytics. Angstrom is to create highly sophisticated pricing and forecasting capabilities.
“I think the moves that we’re now making with Entain, our partner, and the moves
we’re going to make with Angstrom, as an onboarded partner for BetMGM, will get us to
a place where we’ll be back in that game in a meaningful way and hopefully begin to
gain some share back.”
Hornbuckle has a plan to regain online casino market share through the sports-focused partnership.
BetMGM to use cross-sell strategies through Angstrom
While DraftKings says it operates the best product, it also capitalizes on sportsbook users crossing over to the online casino. It helped the company achieve 88% year-over-year revenue growth.
“It’s kind of like this halo effect of when you retain better and cross more people into the NBA on the sports side, that then has some spill-over effect on iGaming,” Robins said.
BetMGM appears to be employing a cross-sell strategy, too. With a better product, thanks to Angstrom, BetMGM should be able to cross-sell effectively.
“On the casino side, it’s simply sports betters. About 30% of them migrate over to the
casino. If you leave that in the equation, it’s part of the reason iGaming has come down a couple of points, but we continue to dominate. We’re not naive that they’re not coming after us in that forum.”
Hornbuckle is right. BetMGM is mostly dominating the online casino industry, however, it has room for improvement. Both statements can be true. Since BetMGM is still in a good position, it shouldn’t take much for them to get back on top.