The sports betting industry is looking at major expansion this year as new sports wagering companies are hoping to launch while a big state will vote on possible legalization in November.
The top sports betting operators DraftKings (DKNG) – Get DraftKings Inc Class A Report, FanDuel, Caesars Entertainment (CZR) – Get Caesars Entertainment Inc Report and MGM Resorts International’s (MGM) – Get MGM Resorts International Report BetMGM may soon be joined by a couple of sports media companies that say they want to get into the sports wagering business.
Private equity firm Apollo Global Management (APO) – Get Apollo Global Management Inc. Report, which purchased Yahoo for $5 billion from Verizon last year, is testing the waters for a merger of its Yahoo Sports subsidiary with a sports betting company, a person with knowledge of the discussions told CNBC.
Among the companies Apollo and Yahoo have spoken to is Australian-based online sports wagering company PointsBet Holdings, according to the Wednesday report. The discussions are in early stages with no deal currently on the table.
However, if a deal is finalized, CNBC’s sources say Apollo and Yahoo hope to spin off Yahoo Sports and keep the Yahoo branding.
Mouse House Considering Online Sports Betting?
The Walt Disney Co. in its first-quarter 2022 earnings call on Feb. 9 and its fourth-quarter 2021 earnings call on Nov. 10 said it was interested in pursuing an online sports betting platform that could be tied to its sports network ESPN.
“We’re also moving toward a greater presence in online sports betting,” CEO Bob Chapek said in the November call. “And given our reach and scale, we have the potential to partner with third parties in this space in a very meaningful way.”
In its February call, Chapek said that while multiplatform television and streaming will continue to be the foundation of sports coverage for the immediate future, the company believes its opportunity goes well beyond those channels.
“It extends to sports betting, gaming and the metaverse,” Chapek said.
Disney, however, has not yet released any specific plans for an ESPN Sportsbook, sports betting or gaming.
Apollo’s Yahoo and Disney will have plenty of work to do to establish sportsbook name recognition once they launch their platforms. A December survey by Morning Consult found that 78% and 73% of respondents were familiar with DraftKings and FanDuel, respectively. And 65% were familiar with Caesars.
Online Bettors’ Favorite Sportsbooks
The survey also revealed that about 61% of bettors use DraftKings, 56% use FanDuel and 40% use Caesars. DraftKings and Fan Duel are estimated to hold a combined market share of 65% of the digital betting industry.
As more states legalize sports betting — it’s legal in 32 states — more mobile sports betting companies have launched sportsbooks. One of the newest online sportsbooks to begin taking bets is television streaming platform fuboTV’s FUBO Fubo Gaming, which signed its first contract with Caesars in March 2021 for access in New Jersey and Indiana. On Feb. 10, it signed its second agreement with Caesars to operate Fubo Sportsbook in Mississippi, Louisiana and Missouri.
The next state scheduled to decide its sports betting future is the largest state, California, whose voters go to the polls Nov. 8 to decide whether they approve of the California Legalize Sports Betting on American Indian Lands Initiative.
If approved by the voters, it would “legalize sports betting at American Indian gaming casinos and licensed racetracks in California,” according to Ballotpedia. Profits from sports betting at racetracks would be taxed 10% and roulette and dice games at tribal casinos would also be legalized.