How Casinos Unaffiliated With Sportsbook Apps Will Stunt Own Growth

The sports betting industry has been waiting for mobile sports betting to launch in New York. It’ll make sports betting conveniently accessible for downstate New Yorkers who don’t want to drive through the city to reach a casino. (Going through the Lincoln Tunnel or using the Staten Island ferry may not be much better on game day.) New York’s casinos are already partnering with sportsbooks to offer mobile sports betting when it goes live in Q1 2022. 

However, there are still retail casinos without mobile sportsbook partnerships. There’s still time for these holdouts to reach agreements with mobile sportsbooks. However, failing to reach bettors through mobile sports betting would be problematic for two reasons. 

First, mobile sports betting generates most of the sports betting revenue in new sports betting markets. In nearby Pennsylvania, mobile sports betting comprised 91% of sports betting handle in fiscal year 2021. So, mobile apps are critical platforms for casinos that want to generate revenue from sports betting. 

However, mobile apps are also important ways for casinos to convert sportsbook customers to casino customers. Casinos depend on foot traffic to generate revenue on the casino floor. So, getting online sports bettors to visit retail casinos will be a critical revenue generation strategy for New York casinos. 

NY Mobile Sportsbook Revenue 

Some estimates project mobile sports betting revenue in New York as high as $1 billion annually. That’s a massive market that retail casinos can profit from in a few important ways. 

First, retail casinos can form partnerships with sportsbook apps early and cash in on that market quickly. However, a handful of sportsbooks often gain disproportionate amounts of market share in-state markets. DraftKings and FanDuel can command half of a state’s sports betting market share, as they did in Pennsylvania in October 2020 when Pennsylvania and online betting, in general, was relatively new in the US. These two apps are notorious first-movers that set the bar for state competition. 

That creates a serious challenge for any sportsbook app that launches after DraftKings, FanDuel, and any other book that launches alongside them. Casinos that form sportsbook partnerships early—and with early entrants—can expect increased revenue from those partnerships compared to casinos that form partnerships late.  

Even though most sports bettors aren’t loyal to one sportsbook, DraftKings and FanDuel’s standard-setting effect on the market will make it harder for late entrants to capture market share. Casinos must be prepared for decreased sports betting revenue if they delay mobile sportsbook partnerships for too long.  

Cross-Marketing: The Real Value 

Retail casinos have omni-channels, which are a collection of different ways to get customers to bet at casinos. Casinos can use free casino games to get players familiar with the brand and more curious about a casino’s real-money games. Loyalty programs get retail players to expand their play from the casino floor to the state-wide mobile app. 

Recently, mobile sportsbooks have been used to convert sports bettors to casino players. allows online bettors in New Jersey and Pennsylvania to toggle between its online sportsbook and casino product. A similar situation exists in Connecticut, which just reported $4 million in sports bets placed within its first full month of operation. In Connecticut, two apps offer both sports betting and online casino products.

New York doesn’t allow online casinos like New Jersey, Pennsylvania, and Connecticut. However, New York gaming operators can learn from and cross-sell their sportsbook and casino customers. That cross-selling should encourage customers to visit retail casinos in-state to generate foot traffic—and revenue—on the casino floor. 

Mobile Partnership Vs. Cross-Marketing Revenues 

Cross-marketing opportunities through online sportsbooks will likely be a greater long-term benefit for casinos than revenue-sharing deals with mobile sportsbooks. 

In fiscal year 2019, New York’s casinos made $2.7 billion in gross gaming revenue. Even though mobile sports betting is expected to generate $1 billion in gross revenue, casino partners typically get 5-15% of mobile sports betting revenue. In the most optimistic scenario, mobile sportsbook partnerships could only generate $150 million for the casino industry at market maturity. That would’ve been 5.5% of New York’s annual casino revenue in 2019. 

That’s a drop in the ocean compared to electronic gaming device revenue. 93% of New York’s casino gaming revenue came from electronic gaming devices. If New York’s casino industry increased revenue from electronic gaming devices by 6%, they could’ve made an additional $152.4 million in 2019. Revenue from electronic gaming devices increased 4.5% from 2018 to 2019 with no mobile sportsbook partnerships. With a properly leveraged omni-channel, that’s not an unrealistic growth target for the industry.

So, leveraging sports betting’s popularity to get customers to bet in person is likely the greater benefit than partnership revenue.

The Hidden Benefits Of Omni-Channel Optimization

Revenue deals are easier to understand and make headlines from than omni-channel optimization. However, the greatest long-term benefit to retail casinos partnering with mobile sportsbooks will be cross-marketing opportunities rather than revenue sharing. 

That’s not to say revenue sharing is unimportant. Any business would welcome 5-15% of DraftKings’ or FanDuel’s state revenue. However, cross-marketing allows retail casinos to reactivate bettors who don’t go to the casino anymore. Every customer has their own reasons for not visiting a retail casino regularly. However, bettors who pick up mobile sportsbooks can be given new reasons to revisit the casino floor.

Even though New Yorkers won’t be able to play casino games on their phones, casinos will be active behind the scenes of mobile sportsbooks. Bettors could see promotions with sportsbooks’ partnered casinos that would reward bettors for retail casino gaming—especially on slots games and electronic gaming devices. 

Consequently, retail casinos that fail to forge partnerships with mobile sportsbooks could see lower revenue growth than their partnered competitors. Revenue sharing promises a consistent amount of money, but it’s not going to drive growth year over year. But the real value of mobile sportsbook partnerships will be the ability to convert customers from mobile to retail users.  

About the Author

Chris Gerlacher

Christopher Gerlacher is a senior contributing writer for NY Sports Day. With an interest in both sports and finance, his passion is analyzing the sports betting industry, where his two interests intersect.

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