Three big takeaways from the Next.io conference in New York City
A few things I learned at last week's sports betting conference in the Big Apple
I hadn’t been to the Next.io summit in a few years, but it’s become a very good barometer of what’s going on in the sports betting space — especially from a marketing and investment viewpoint — and the conference has really stepped up its game. It’s always been in New York City — which was certainly easier to attend when I was working at ESPN in Connecticut than out in Vegas — but a few years ago it was at a much smaller venue.
This year’s looked and felt bigger, and was headlined by conversations with Stephen A. Smith and Matthew Berry, along with panels involving many executives in the space, including Fanatics Betting and Gaming CEO Matt King.
Between the panels, networking events and various conversations I had, here are a couple things I learned:
Legal sports betting will come to California … but not anytime soon
-North Carolina launched legalized mobile sports betting for eight operators — including Underdog in its first foray into sports betting — on Monday, but it will likely be the only state to launch sports betting in 2024. And while it’s certainly a big deal in the industry, both because of the population size of the state and the data point of what market share could look like with all operators having the same head start, it’s nothing compared to the opportunity that awaits in California.
The window for California has passed in 2024 and it looks unlikely that the state may legalize sports betting in 2026 — in fact, 2028 may not be as likely as we once thought. It was interesting to me that during the first panel of the day, BetMGM CEO Adam Greenblatt said, “Texas is in our near-term model, California is not.”
Given how far away many people think Texas is from legalizing sports betting, this stood out to me.
The opportunity is too big for the gambling industry as a whole for California not to legalize sports betting, but it’s going to take some time. As Edward King (co-founding partner, Acies Investments) noted on the panel, “Come the end of the day, it’s an inevitability for California.”
-Also interesting: All five panelists on that first panel said it was fairly neutral for them whichever candidate won the 2024 U.S. Presidential Election.
Focus on Gen Z, AI and sweepstakes
-Multiple panels brought up the differing social and online habits of Gen Z, including how they will force gambling companies to change. Gen Z likes to play highly-engaging games, share bet slips and be a part of a community. Several panelists brought up how Gen Z likes to share betting slips and have bragging rights over their friends in the gaming space.
“Operators will need to think more creatively around original content that drives brand awareness but also brand affinity, and that builds a real connection with the audience,” Joey Levy, CEO and Founder of Betr, said. He also noted how the company would fail if it was known as “Jake Paul’s sports betting company” and that the goal was to “incubate the next 100 Jake Paul’s.” A little of a scary thought.
One investor noted that Gen Z overindexes on spending money on entertrainment, but only 20% identify as sports fans. It all speaks to how the sports betting industry could evolve in the coming years.
-Several panels touched on sweepstakes, which could be where some more investment money is headed. There are only a few states (Michigan and Montana) that have ruled on the legality of sweepstakes, but they’ve been around for a long time and other states haven’t taken a position on them. As Bill Gantz, Partner at Duane Morris LLP, noted, “Gambling has prize, chance and consideration. For sweepstakes, there is no consideration.”
In other words, there is no entry fee for sweepstakes games, but customers can win real prizes.
-Artificial Intelligence was brought up on several panels, in regards to security (Know Your Customer protocols, etc.), improvements in betting apps (e.g. serving up betting customized bets via personalization for customers) and many other applications. It will continues to play a big role in sports betting and the companies that harness it best will see huge results.
Second phase of U.S. sports betting has arrived
On his panel, Fanatics CEO Matt King opined that we were in the “third inning” of sports betting, as many people have used the baseball game analogy to refer to the journey of the U.S. legal sports betting market.
With 38 states now legal and 30 with mobile betting, King said, “We’ve gone through the land-grab phase and people are focused on fundamental innovation. We need to step up messaging around responsible gaming, have the right amount of advertising and more rationality in the industry.”
In other words, the days of $1,000 promos for new states are over. A differentiated product (Fanatics, Underdog) and something that is differentiated is a lot more likely to help operators gain market share. “We’ll have something unique in the ecosystem and market share will take care of itself,” King said.
With only 12 states left to legalize, including crown jewels Texas and California, the pace of legalization will slow down over the next few years and hopefully product will help a few companies rise to the top, rather than marketing spend.
Looking forward to attending the SBC North America Summit in early May in Secaucus, New Jersey.