Morning Constitutional Reading Material - Flutter Deal The Grove Report...Informative weekly industry email. See hyperlink below, if you wish to sign up and get your own report. I won't be posting the newsletter going forward.
THAT'S A LOT OF NAMES YOU HAVE THERE. The march toward the land of the mega-operators continued this week with the announcement of a planned tie-up between The Stars Group and PaddyPower Betfair.
Optimally operating two brands in the U.S. will rely on (i) crafting and communicating unique propositions to distinct groups of customers and (ii) customers actually caring about the difference.
We expect FoxBet to be positioned as the mainstream brand with a streamlined, simplified interface and for FanDuel to be positioned as a brand focused more on betting enthusiasts with greater depth of markets, options, and tools.
The two brands will share a single platform, and will have significant incentive to bring much of the tech stack in house. How much they bring in house, and who supplies the parts that remain external, will have significant implications for the supplier landscape in the U.S. market.
While the U.S. opportunity is leading the discussion around the deal, it's the international integrations that will determine whether the deal sinks or swims.
DFS KNOWS CASINO. The DraftKings-FanDuel tandem–which owns the New Jersey online sports betting market–is leveraging sports cross sell to amass significant share of that state's lucrative online casino market.
In August 2019, we estimate that the two brands had 25%+ market share. Since December 2018 (when DraftKings launched), the two brands have achieved a 22% average monthly market share, according to our proprietary tracking.