“‘Where the tax rate beyond a certain threshold, we see the continued health of the black market, which means no player protections, no integrity of games, no compliance.’”
That was BetMGM CEO Adam Greenblatt, who joined FanDuel CEO Amy Howe and MarketWatch tech editor Jeremy Owens in a spirited discussion of the future of online sports betting and casino games at MarketWatch’s first-ever Best New Ideas in Money Festival on Wednesday.
This was the first time that the competing online gambling execs have ever shared a stage, but they were perfectly ‘respectful rivals,’ the moderator noted. “See, we get along just fine!” Howe said with a laugh at one point, when Greenblatt asked to answer a question first.
Indeed, they both agreed that their companies need to team up to get the legal online sports betting and gaming industry off the ground. “One the one hand, yes, we do compete,” said Howe. “On the other hand, we have to collaborate in order for the markets to open up.”
And in the spirit of good sportsmanship, they also suggested that states like New York need to pull back on their tax rates for online betting operators. New York requires that each operator pay a 51% tax rate to the state for 10 years, for example. ” I would like to see us continue to work towards a better, more visible, more player-friendly and more sports-friendly environment,” Greenblatt said.
“Adam’s spot-on,” chimed in Howe. “The last thing you want to do is push [operators and gamblers] back to the black market. Remember, 65% of the U.S. population is residing in states where online gaming has not been realized yet, and there’s still a massive black market.”
They’re also keeping a close eye on whether legal online gambling gets passed in California in November. “California the fifth largest economy in the world, 12% of the U.S. population,” said Howe.
Online sports betting has certainly become a game-changer in the U.S. ever since the Supreme Court struck down the federal ban on the state authorization of sports betting in 2018. Consider this: NFL and college football betting could reach a record-breaking $31 billion this season. Some 46.6 million American adults say they’ll be putting skin in the game during the 2022 NFL season, which is up 3% from last year. And one major reason for that is the increase in states that offer legal sports betting.
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As of September 2022, 31 U.S. states, plus Washington, D.C., offer some form of legalized sports betting. And a proposed ballot measure in California this November (Proposition 26 and Proposition 27) could pave the way for America’s most populous state to begin accepting sports bets, as well.
Both Howe and Greenblatt credited the ability for online sports betting to let sports fans place bets during games, in real time, as helping to drive more interest and engagement in watching sports. Indeed, when New York’s online sports betting market launched last January, Howe said that FanDuel saw more than 1 million active users on opening night, and 180% year-on-year growth on her platform. “The numbers are just spectacular,” she said.
“Connecting with the game and journeying into the gaming experience is why [BetMGM] announced this morning our partnership with NBC Sports and Fifa ,” added Greenblatt. “We’re going to be in the pregame broadcast, with the idea being to connect with fans where they are for the most-watched studio-produced sports show. It’s a peak acquisition moment.”
Both online sportsbook operators also discussed the steps they are taking to get more women and first-time sports bettors into the game, noting it is Responsible Gambling Education Month.
“Our position has always been, our sector should be only about entertainment and fun,” said Greenblatt. “And to the extent we can support players if the product becomes challenging, that is what we do.”
Howe also called responsible gaming. “a critical priority” for FanDuel, adding that her company recently hosted an educational event to help employees identify risky behavior on the platform.
“That’s not something regulators told us to do,” she added. Rather, both FanDuel and BetMGM and their fellow competitors are playing the long game to keep their growing industry fun and viable.
The “Big Bet” session featuring Howe and Greenblatt was just one of the many events at MarketWatch’s inaugural Best New Ideas in Money Festival this week. MarketWatch’s top editors have been hosting Q&As with investing legends and entrepreneurs like Carl Icahn and Ray Dalio to tease out their financial advice. And there have been sessions covering hot sectors like crypto and cannabis, workshops to manage your money like a pro, and more.
Get insights on investing and managing your finances. Speakers include investors Josh Brown and Vivek Ramaswamy; plus, topics such as ESG investing, EVs, space and fintech. The Best New Ideas in Money Festival continues Thursday. Register to attend in person or virtually.