Gianni’s only just turned 4, but when he holds a bat it’s with all the elegance of Joe DiMaggio supporting the elbow of the world’s most famous blonde as he glides her out to the dance floor of the Copa. A sort of rolling balance seems to obtain in the interface between his chubby little hands and the plastic grip of the fat-barreled Wiffle knockoff, which he waggles a bit as it settles into a 45º angle with the kitchen floor.
The illusion of grace is shattered as soon as he swings, largely because he’s not using the bat in the Doubleday-prescribed fashion. Joe D. gives way to Joe Don Baker busting up the Lucky Spot in Walking Tall as Gianni smashes his way through a pyramid of plastic fruits and vegetables. The next cut catches Big Bird square on the beak. A third upsets the fake cash register.
“Why-a you no pay?” he yowls, in a preschooler’s approximation of a Scorsese-directed Looney Tunes short. The bat makes a funny noise as it bonks the beleaguered shopkeeper’s skull. The dog doesn’t know what to think. Another swing upsets a display of dry goods. Grover looks on, ping-pong eyed and slack jawed.
What’s happening here is a little something we call “Sesame Street Shakedown.” Gianni’s my nephew, and while some of the other grownups gathered at his Nonna’s house are demonstrating various degrees of disapproval, the attack on the luckless grocer is meant to serve as an object lesson about why gambling is a fake idea. There are no shortcuts to the American Dream, and those who think otherwise must sooner or later taste the polymer corrective. Reaching over the counter, Gianni grabs a wad of bills from the toppled register; as he makes his getaway, the tiny hoodlum warns that he’ll be back tomorrow for the rest of his money.
Gianni stuffs the money in the front pocket of his pants, which have bears all over them. His mother is being a little rough on the pots and pans. Nonna makes noises that are consistent with Neapolitan disapproval. Everyone’s mad at me, but 18 years from now, when Gianni’s graduating first in his class from Harvard without ever having bet a point spread, I’ll be the very picture of radiant benevolence as I accept their apologies.
As I await my richly deserved canonization, the seasonal sports-betting frenzy is about to boil over. While this NFL season won’t bring about a perceptible increase in the volume of gambling ads—the league is sticking with its six-spot-per-game limit—that’s not to say that the deluge of FanDuel and DraftKings promos will be any less suffocating this fall.
Customer-acquisition efforts paid off handsomely in 2021; according to the set of numbers crunched by the research firm Eilers & Krejcik Gaming, FanDuel last year boasted a 36% share of the gross online sportsbook wagering revenues generated in the U.S., topping DraftKings (24%), BetMGM (15%) and Caesars Entertainment (7%). The share estimates align closely with each brand’s advertising budget; per iSpot.tv estimates, FanDuel accounted for the greatest chunk of the $282 million spent on gambling ads during the 2021-22 broadcast season, in exchange for which it racked up 34% of the category’s overall impressions.
During the half of the broadcast calendar that coincided with the 2021 NFL season, sportsbook spend was governed by a healthy dissonance in the brands’ respective marketing strategies. While FanDuel and DraftKings led all comers in September and October, both books began to pull back on their TV investments as the surge of early sign-ups began to slow to a trickle. As those brands shut off the tap, Caesars rushed to plug the gap; according to iSpot, from Nov. 1 through the Super Bowl, the book repped by J.B. Smoove and Halle Berry accounted for 66% of the category’s estimated national TV ad spend while cashing in on 51% of the impressions.
NFL media partners banking on another second-half Caesars’ spree may need to revise their expectations. Caesars CEO Thomas Reeg last month told investors that the casino conglomerate had slashed its marketing costs to the bone. “We have pulled … hundreds of millions of dollars that we were planning to spend,” Reeg said during the company’s second-quarter earnings call, before adding that Caesars had reabsorbed “almost a half-billion dollars” originally earmarked for customer-acquisition/marketing efforts.
Caesars’ austerity measures were to some degree determined by a lack of activity on the legalization front, which hasn’t given rise to a major market launch since online sportsbook (OSB) officially kicked off in New York on Jan. 8. Ohio will be the next major state to roll out mobile wagering, flipping the switch on New Year’s Day 2023—too late for Buckeye Staters to place their bets during the NFL regular season, but well in advance of the playoffs.
That said, look for the space’s most enthusiastic proponents of the you-gotta-spend-money-to-make-money philosophy to largely reprise the patterns they established last fall. “We don’t think our competitors have followed us; they’re still spending,” Reeg told investors. That’s good news for the TV networks and digital outlets that have played host to OSB spots; according to a year-end filing with the Securities Exchange Commission, DraftKings’ total sales and marketing costs nearly doubled in 2021, adding up to $981.5 million.
In that same document, DraftKings disclosed that nearly 80% of that outlay was spent on activities related to the acquisition and retention of gamblers. Sales execs say they anticipate another robust season for the category, while acknowledging a possible pinch in the back half of the fall campaign should Reeg stick to his guns. That said, OSB buys don’t determine the overall strength of the NFL sales market, as the usual suspects (insurance, telcos, fast-food/casual dining) remain the biggest revenue drivers.
That’s probably for the best, as novices and curiosity seekers may be far less inclined to throw their hard-earned money away on the Vegas lines. Money’s harder to come by than it was a year ago; on Thursday afternoon, DraftKings shares were trading at $16.52 a pop, down 74% from the year-ago $63.67, while FanDuel parent Flutter Entertainment was priced at $117.74, down 41% vs $201. (During the same span, the S&P 500 Index has dropped 15%.)
If NFL season spending patterns largely approximate what we saw last fall, most insiders say inevitable consolidation in the OSB space will make the industry all but unrecognizable in the next few years.
“The secular trends in this industry point to years and years of M&A,” said Rick Arpin, managing partner-Las Vegas for KPGM US, during a recent SBC Summit North America conference. “There’s lots of aggregation and disaggregation that’s going to happen in this industry.”
As a very young gaming industry rides out its growing pains, the microtrend of scaling back marketing spend—Wynn Interactive is the latest OSB player to slash its media budget—will likely persist as bigger fish start gulping down the small fry.
“The middle sucks, right?” Arpin said, in a nod to the fact that operators such as Rush Street and Churchill Downs haven’t dumped tens of millions of dollars into paid media. “You have to either be big or you have to be focused. And so I think we’ll continue to see some level of consolidation.”
The anticipated shakeout will only accelerate if Wall Street keeps beating up on the publicly traded gaming companies. And while those that went the IPO route are facing a significant loss in market value, privately held companies are likely to have a more difficult time raising enough capital to survive the crunch.
In the meantime, a new football season has arrived, and with it comes a renewed effort to ensure that the small people in my family don’t start forming a whole bunch of favorable impressions about gambling. (If an immersive activity like Sesame Street Shakedown is too “problematic” for the likes of your clan, just tell the children that Jared Carrabis tried to kill Santa. You can probably get away with lying to them for another decade or so; after all, kids are pretty dopey, and their Google skills are laughable.)
While you’re at it, feel free to supplement your disinformation campaign for the footy-pajamas set with a screening of the original Space Jam. I watched the Michael Jordan-Bugs Bunny buddy picture the other day with Gianni, and the film reinforced my sense that the little guy has learned something from his immersion into simulated grocery mayhem.
During a scene where the guy who played Newman on Seinfeld drops off His Airness at his surprisingly modest on-screen manse, Gianni asked why the zillionaire basketball star and personal friend of Porky Pig lived in a house that is smaller than Nonna’s. “He used to live in a much bigger house, practically a castle, but he gambled all the money away on poker and other games of chance,” I said, as a bulldog named Charles flattened Jordan in the driveway.
“Gambling is bad,” Gianni said. Then, Lola Bunny appeared, and it got all quiet. Pleased with the evidence that I’d gotten my point across, I gave the kid the thumbs up and then got up to put $1,000 on Syracuse.