It is sports for some people and betting for others. Excitement does not die down for sports enthusiasts, no matter how they participate. After focusing on sports betting for a while, the segment has emerged as a clear winner in all the major regions worldwide, especially the US. It has now been learned that many sports betting operators are considering merging their resources to provide a better experience to customers.
Leveraging the popularity of sports and betting on sports, some operators like Flutter Entertainment and DraftKings are on their way to making some significant advancements. For instance, Flutter has already acquired The Stars Group, while DraftKings is in the final stages of its acquisition of SBTech.
It means the operators would be able to collaborate their operations to have a higher level of engagement with players and hopefully retain them for a longer time.
Most of them use data and analytics to offer a tailored experience to customers. A combination of mergers and acquisitions enables everyone to share those capabilities. As for bettors, they gain benefits in relation to a wide variety of odds, several promotions, and access to different markets worldwide.
It is estimated that the ones to be consolidated will be small operators who find it hard to survive in the market. The previous year was challenging since it was the year of recovery from the pandemic. Things are working well, and significant buyers like Fanatics and MGM are now going on a consolidation spree with potential targets like Rush Street Interactive and PointsBet.
Mergers and acquisitions are centered on the road to profitability, customer loyalty, and vertical expansion through diversification.
The path to profitability means cutting down on every activity, fetching little or no return on investments. That fund will be either saved or invested elsewhere for higher growth. Similarly, diversification into new verticals for sports betting sites refers to keeping the local heroes that have the potential to grow with a little bit of support.
Loyalty, as the word literally means, includes rolling out rewards for customers who have stuck with their favorite sports betting operator for a long time.
The equity value of some of the best USA sportsbooks has declined even though stocks have rebounded in 2023. Nonetheless, the industry still needs mergers and acquisitions, according to Rick Arpin, KPMG’s managing partner for the Las Vegas office.
There is a shift in focus as well, something that has been talked about by Jeff Roth, a partner at Ruth Capital. Jeff has highlighted that the focus was earlier on launching and scaling the operations, but that has transitioned to earning profits for the venture.
In addition, the desire to connect with a large number of customers is a factor. Fanatics is interested in potential collaborations enabling the brand to reach 20 states by the end of 2023.