Pick a US media brand, and chances are they now have an official betting partner. Earlier this month, Turner Sports – the owner of Bleacher Report – joined the party, coming into line with the likes of Fox, ESPN, NBC and CBS.
It means US sports betting operators have now committed billions of dollars to media properties over the next decade. The sheer ubiquity of these partnerships is relatively unique to the US. But the concept itself can be directly traced back to Sky Bet, which used its relationship with broadcaster Sky to become the most popular bookmaker in the UK.
But despite the money being spent, there isn’t yet any evidence that the Sky Bet model can be replicated. So, it’s worth considering; what ingredients made Sky Bet a success? Was it all down to the relationship with Sky? And if not, do US firms need to re-evaluate?
The genesis of Sky Bet
Sky Bet was born when the broadcaster acquired a small telephone and online betting company Surrey Sports back in 2000. In 2002 it was rebranded to Sky Bet and ran as its own entity. Crucially, senior staff worked on both sides of the business, meaning there was a mutual understanding of shared objectives from the outset.
“The secret ingredient is that it was a true partnership,” said Andy Clerkson, an advisor for Fox Bet and partner at gambling PR firm Red Knot Communications.
“It sounds cliché but you need people who have worked on both sides of the business, who understand what both sides are trying to do.”
That’s not necessarily the case with many of the media deals we’ve seen in the US.
“We’ve seen some souped-up affiliate deals with one side assuming risk,” said 888’s US chief Yaniv Sherman. “Long term that’s not a real partnership.”
Perhaps the closest Sky Bet replicas in this sense are Fox Bet and Barstool. Both operators use the media brand as the sportsbook name and use the media talent as a core part of the promotion. That helps create an air of authenticity and trust around the brand.
“There’s a lot of genuine enthusiasm from Barstool and genuine love from their fanbase,” Clerkson said. “I’m a big fan of what they’re doing.”
“I’ve been obsessed with Barstool for two years now,” added Ismail Vali, the chief product and marketing officer at CX agency A Game Above.
“I’ve never seen a community like that. A group of people who love to bet and talk about betting – it’s perfect for this model.”
There’s an important caveat though.
Even with its structural advantages, Sky Bet didn’t really take off for a decade after it launched. It came into 2010 with under $130 million in annual revenues. Fast forward ten years, and it is tracking for around $1.2 billion in 2020 revenues.
What prompted that explosive growth? The presence on Sky didn’t necessarily change, but the operator figured out how to properly mine its niche.
It launched free-to-play games in 2008, advertised on TV and SkySports.com as a way to acquire casual users. It pushed rec-friendly product features like request-a-bets and the now ubiquitous odds boosts.
And crucially, it focused on mobile technology before rival firms really picked up on its importance.
In other words, Sky Bet wasn’t just a function of its media parent, it was an excellent sportsbook operator in its own right.
“Their dependence on Sky media wasn’t as great as you’d think,” said Robin Chhabra, the former CEO of Fox Bet and now president at Tekkorp. “Sky contributed maybe 20% of new customers, so it was material but not the majority by any means.”
Sky Bet was one of the first operators to embrace Facebook advertising for instance.
Fortune favors the brave
And as with any great business, there was a dollop of luck involved too. Vali was working alongside Sky Bet in the early 2000’s, when they spent around four years working on the architecture for interactive TV betting.
“We thought that was four years wasted, but when smartphones came along we realized the architecture was basically the same and we had a four-year head start,” Vali said. “And far more people bet on smartphones than would ever bet on TV.”
That had nothing to do with Sky. And while the likes of Barstool have a strong foundation, it won’t matter in the long run unless they can nail that customer experience for the modern US customer.
“Where’s the benefit for the customer of all these deals?” Vali asked. “Who’s coming up with something unique? Until we see a killer application from the customer perspective, it’s too early to evaluate these deals.”
The US market to date has been focused on launching in new states over product development. But that will be the key battleground going forward.
National scale will benefit media deals
In the short term though, media deals can offer benefits beyond just a good brand. If nothing else, a presence on a major TV network lends immediate legitimacy to an operator – just look at PointsBet stock after the NBC deal.
And while Fox Bet is still playing catch-up with FanDuel and DraftKings, the media model really starts to pay off when used on a national scale.
“It’s hard for Fox to target the four states where they are live currently,” Clerkson said. “You’re worried about wastage and you’re not quite seeing the full power of the property unleashed. But when they are in 10 states, 20 states, then the national brands are so powerful.”
Another key part of the Sky Bet success story was its appeal to the mass market and specifically, non-bettors.
Sky Bet likes to boast that 60% of its customers only bet with Sky Bet. These are people who might only bet a handful of times a year, but when you have one million of them – as Sky Bet does – they add up.
Fox Bet is currently going hard after that casual audience, with integrations into Fox News to get in front of a more casual sports fan. The operator is offering free-to-play-games around the presidential debates for instance.
The long view
Ultimately, the jury is still out on whether the Sky Bet model can be repeated. US firms can replicate tight, authentic integrations, and the use of free-to-play games. And the power of properties like Fox, NBC and CBS should only grow as more states adopt legal sports betting.
However, there are also some fundamental hurdles in the way. For starters, no single outlet – even the mighty ESPN – has near exclusivity over major sporting events in the way Sky did in the early 2000’s.
There’s also the fact that a media deal, even if wildly successful, is unlikely to provide a majority of your customers over the long term.
That’s the challenge for brands like Fox Bet and Barstool. They still have to build a business and a product that attracts and retains customers in its own right. And for that, there is no magic bullet.