ESPN Bet seems to be increasing national sports wagering market because it tempts a large number of women, according to a global research analyst at Bank of America. In addition, on this occasion, he also advertised the recently-launched Durango Casino & Resort, which draws 25,000 visitors daily.
Increased sports betting handle:
State figures published over the past week showed a “strong share of ESPN Bet,” and that its range is showing to be bigger than expected, according to Shaun Kelley. In addition to lending a helping hand to ESPN Bet, Kelley also hypothesized that “the new platform was attracting more women,” as mentioned above.
According to the states that have published figures for November, sports betting handle saw an increase of nearly 15% on a monthly basis from nearly 2% per month in 2022. In this regard, in a note to investors, Kelley wrote: “It’s our sense ESPN Bet could be growing the market through more casual and female bettors compared to other sportsbooks. In November, ESPN’s share came from DraftKings, BetMGM, and Caesars, while FanDuel gained one point of share, which we think is driven by NBA seasonality and increased marketing.”
Furthermore, ESPN Bet has collected nearly 6% handle share in only half a month, which indicates a financial performance of nearly 10%, which is higher than the predicted 6% or 7%. In this regard, the initial key conclusion indicates that even though it’s early, the presented metrics are greater than predictions of others and theirs operators and investors. On that note, Kelley commented: “A 10% run-rate share was achieved with limited integrations or marketing, leaving room for growth from here.”
Upcoming launch of BetMode:
Shares of the market gain are identical and promotional offers are normal in mature and fresh states, and the integrations have the potential to help the aforementioned ESPN Bet to stay away from the “pop and fade,” because investors are already focused on the next steps.
On that note, Kelley said: “We think ‘Bet Mode’ in the ESPN Media app will launch before the Super Bowl and could support further adoption and stickiness to ESPN Bet. Bears are concerned ESPN Bet achieved their market share through promotions, but in Maryland and Kansas, ESPN Bet’s promo is 35% of handle, in line with offers for the launch in Kentucky. That said, given the strong initial uptake, absolute promotional dollars will be high and we’re increasing our loss estimate for the fourth quarter from $130 million to $185 million.”
Furthermore, Bank of America is adjusting its DraftKings model to show retention rates of the industry of only 6% over the past month. However, according to Kelley, they have “high conviction in DraftKings’s growth story, despite increased competition.”
Durango Casino & Resort promotion:
When promoting the recently launched Durango Casino & Resort, Kelley also pointed out that it has been drawing 25,000 visitors per day since opening, as mentioned above. He also added: “This daily visitation is two times the daily average to Red Rock Resort’s other prominent Las Vegas locals property, Red Rock Casino, and about 10% higher than opening week visitation to Wynn’s Encore Boston Harbor.”
Based at Encore’s maturation, Bank of America thinks that number of visitors at the said Durango could stop at an average of 10,000 per day, which is less than Red Rock, which number of visitors have stabilized at 13,000 per day. This visitation could lead to $159m in yearly EBITDA on a balanced basis.
Regarding the risk of neglecting Red Rock, clients of Durango are divided between its and the geographic market of the Orleans Hotel & Casino.
Commenting on that, Kelley said according to CDC Gaming Reports: “Despite the overlap and concerns of Durango cannibalizing demand at Red Rock, visitation to both Red Rock and Orleans was actually up year over year in the first week of Durango’s opening, which could be driven by the NBA in-season tournament. While there aren’t signs of cannibalization yet, we will continue to monitor and model Red Rock locals’ revenue down about 4% year-over-year in 2024 to reflect the new competition. We stay underperform-rated based solely on relative valuation.”
On a related note, Red Rock officials said, prior to the opening of Durango, that its opening will definitely shift some clients from Red Rock to Durango. However, they aren’t worried because they will get back in time.