GiG’s Martin Collins talks homegrown heroes in US sports betting – Sportsbook
The agreement between Gaming Innovation Group and Crab Sports positions the company at the forefront of a high-potential sector in the US sports betting market. At a time when national brands are increasingly reconsidering large advertising spend, opportunities may arise for these local heroes to carve out a niche in a number of states.
Across Europe, there are many examples of ‘local heroes’, brands using their national advantage to carve out a strong local position. Brands like Winamax in France, Snai or Sisal in Italy and Betcity in the Netherlands, even if they have developed beyond their borders, are inextricably linked to their national markets.
It has yet to hit the United States to date, although the underlying reasons are fairly obvious. The state-by-state costs of doing business, coupled with a limited number of licenses on offer, meant that the brands with the deepest pockets and the biggest advertising budgets gobbled up all the available space.
However, regulatory frameworks are evolving to create space for new entrants who can act as local disruptors. Maryland, for example, has developed a larger model in which in-person betting will be open at 10 casinos, sports stadiums and racetracks, with another 30 available for other physical businesses in the state.
These license holders will then be eligible for a mobile betting license, with legislation allowing up to 60 to be issued.
This creates one of the largest state markets in the United States to date and opens it up to a large number of new competitors. One of those gearing up to compete is Crab Sports, a company founded in 2021, which this week finalized a tentative deal with Gaming Innovation Group (GiG).
The general playbook for newcomers to the United States is to find a foothold in one state and then use that as a springboard to move into others. For Crab Sports — named after one of the state’s most popular dishes, no less — Maryland will be the sole focus.
The deal marks GiG’s first sports betting deal in the US since its acquisition of Sportnco, something which sales and business development director Martin Collins calls “a game changer” for the provider.
“The number of opportunities we have has increased dramatically – previously we didn’t have the competitive sports betting product to deal with it,” he says.
That’s not to say that getting the main deal done was an easy process. “It was really stringent, similar to a first-level deal,” Collins says. “They wanted to be sure they were choosing the right platform to achieve their goals.”
It is also the result of ongoing conversations across the industry, particularly with the investment community. This ongoing dialogue helps GiG identify opportunities to act quickly and secure introductions or referrals to potential clients.
“It’s an important source of leads,” he adds. “We expect a third of our leads to come from inbound queries, via marketing; a third from outbound, through the sales team and a third through referrals. For us, it’s the perfect ratio. If you succeed, you get a lot of good opportunities.
Through this approach, GiG targets three types of partners in the United States. As in Europe, it seeks top-tier operators looking to expand into the United States, where it can use its expertise in regulated markets to help them move quickly and efficiently.
The Tribal Marketplace follows, for whom the safer gaming features built into its platform allow partners to grow in a sustainable way, while respecting the community approach adopted in Indian Country.
Crab Sports falls into the third category, that of challenger brands, where the target is a state, and only one state.
This hyper-local focus, Collins explains, can be particularly powerful. Crab Sports will not have the vast resources of heavily backed national operators. “But they have the local know-how and the partnerships to draw customers to the brand,” Collins says.
Build brand equity
He thinks local challengers such as Crab Sports won’t find a place in every state, pointing out that New York, although its bidding process, 51% tax rate and licensing fees of $25 million, means there is simply no access.
“You have states that have defined local identities such as Maryland, Ohio or Louisiana, where there is an opportunity for these challengers to enter,” he continues. “Simply because they can partner with local businesses in the market and get direct access to players by allowing those [outlets] to generate income through sports betting and gambling at a later stage. »
These partnerships may not see a company like Crab Sports dominate the airwaves in Maryland. But by leveraging that local presence, whether through sports teams, entertainment venues, or bars and restaurants, it positions the business as part of the community.
This, Collins says, was built into the deal. “We think it’s not viable to spend a lot, so we’re encouraging customers like Crab Sports to leverage the pillars of the platform. There’s GiG Data and GiG Logic, but the other key piece is the CMS; which allows us to segment the customer journey, to develop personalized journeys for each user.
“They can be acquired through a bar acting as an affiliate or through a campaign with a local team such as the Baltimore Ravens. They can use this information to develop a highly personalized campaign, which creates that brand affinity. »
A tool like Logic, he adds, adds a layer of automation that makes client management significantly less resource and expense intensive. For a rising brand, this significantly benefits its bottom line.
But these campaigns, he stresses, shouldn’t be centered on enticing customers with cash and bells. Even a meal at a local restaurant could be an effective way to engage a player and retain them.
Challengers don’t have the same resources as major players in US sports betting, so they need to be more strategic in how they invest marketing dollars. But even with this vast marketing investment, it remains to be seen whether the promotional spend is actually generating decent returns.
“The major players haven’t done that in other states,” Collins continues. “They acquired players through bonuses and then retained them with ongoing bonuses, and therefore the lifetime value is low and the cost per acquisition is high.
“I’ve been in the industry for 16 years now, and every company has traditionally spent a lot of money on acquisition, but not invested so much in retention. When you do this in a highly regulated and heavily taxed market, it kills any chance of making a profit.
The “spray and pray” approach, after all, is increasingly being questioned. Caesars Digital has pledged to reduce its marketing spend. Churchill Downs is already shutting down its betting and gaming operations. Rumors persist about WynnBet being sold or closed.
“They are now trying to be smarter, push their loyalty programs and build customer relationships based on loyalty rather than money,” Collins says. |But they acquired them through bonuses – it doesn’t create any brand loyalty.
This, in turn, creates room for a new breed of operators such as Crab Sports to find a way in, even on a single-state basis.
“These little brands, the tribes, can drive something unique, even if they see the big brands on their TV every day,” adds Collins. “Over time, I think we’ll see that come to fruition.”