Consolidation in sports betting operations unlikely to slow down
Dan Etna, co-chair of Herrick's Sports Law Group, spoke to the Las Vegas Review-Journal about the wave of billion dollar-plus mergers and acquisitions in the sports betting world. The article explained: "The surge in consolidations comes as the rapid expansion of U.S. sports betting has companies on a constant push to scale up their platforms to reach the growing pool of customers as early as possible while still offering the latest in tech innovations, or risk being left behind."
The article cites Caesars Entertainment, Penn National Gaming, DraftKings and ESPN among the players who have recently acquired other companies to quickly add new technology and customer databases to their existing brands. DraftKings, in particular, noted that the acquisition of Golden Nugget Online Gaming would "enhance our ability to instantly reach a broad customer base" in its announcement, as quoted by the article.
Dan explained, "The sportsbook business, it’s not a high margin business," adding, "It’s profitable business for sure, but the real way to make hay in this business is to have a large following of customers because this is such a scalable business in terms of revenue generation."