Last week was a big one for Caesars Entertainment. On Monday, the retail casino behemoth rebranded the US online sports betting slice of its recent acquisition, William Hill. In most states, the former William Hill apps became Caesars Sportsbook. Caesars will fully rebrand the rest of William Hill’s US online gambling products in October.
What this means for online casino users is that there will be a new challenger for market leadership. Currently, the top spot in that vertical is held by BetMGM Online Casino. The question in coming years will be whether it can hold onto its customers or will lose them to Caesars and other challengers. App engagement now needs to be the name of the game for BetMGM.
No operators were willing to talk to Online Poker Report about their app engagement strategies. Bally’s, WynnBET and Flutter Entertainment, mainly known in the US for its FanDuel and PokerStars brands, declined to comment. OPR received no replies from BetMGM; DraftKings; Scientific Games; Kindred Group, which owns Unibet; and Caesars Entertainment, which owns Caesars Sportsbook and the Caesars online casinos.
Instead, we have to look at what these companies are doing in order to guess at the strategies behind their actions.
Current state of online gambling app engagement
BetMGM holds 30% of the US iGaming market and 24% of the online casino and online sports betting market. These correspond to the number one and two positions in those respective verticals, MGM CEO and President Bill Hornbuckle said last Wednesday during the company’s earnings call. MGM Resorts International and Entain equally own BetMGM, which generated $194 million in net revenue in Q2.
However, its position as the No. 1 online casino in the US is far from secure.
At the moment, iGaming is only legal in Michigan, New Jersey, Pennsylvania and West Virginia. Connecticut may enter the legalized online gambling mix soon.
So it’s a nascent online gambling market in the US. Therefore, brand awareness campaigns are still very much active for most operators.
To that end, Caesars Entertainment plans to spend $1 billion during the next 2.5 years to acquire new online wagering and land-based casino customers, according to the company’s earnings call on Tuesday. The announcement about that outlay comes a day after Caesars rebranded the online casino and sportsbook operator the company acquired in April 2021 – William Hill.
Quality of life improvements for BetMGM customers
New markets and enhanced competition may be part of the reasons BetMGM is going to introduce app enhancements during the next few months. It’s looking to upgrade the customer experience in the hopes of improving app engagement in the process. The enhancements mean it’ll be easier for users to have a single wallet and one simple login in every state BetMGM serves, except Nevada. Bettors will also be able to customize app layouts, use “face ID,” and pay with gift cards and Apple Pay.
“The team at BetMGM is working around the clock on this to get it prepared for football. And I think it will speak to a lot of things of note: loyalty, retention. And our ability to lower our ultimate [cost per customer acquired], which is the goal here, will stick.”
Plus, in its July 22 announcement about its Michigan online live dealer partnership with Evolution Gaming, BetMGM emphasized the importance of enhancing app features. The live dealer offering’s already made a difference for BetMGM in other states, the announcement read:
“BetMGM credits its iGaming success and market dominance, in part, to the live offerings – which have grown 500% year-over-year. Due also to a vast gaming portfolio, proprietary technology and the largest real-money jackpot network in the United States, BetMGM has quickly become the top casino operator in the nation.”
App enhancement is just one of the efforts BetMGM is making to retain customers, Hornbuckle said. Doing so is going to be essential now that Caesars’ marketing efforts are underway.
BetMGM confirms it has its eyes on Caesars
Regarding Caesars and its newly acquired William Hill assets, Hornbuckle said this during the call:
“They’ll be a real competitor. And if you think about what they do and what we do, it’s the most likely competitor to us in the context of same-store loyalty, presentation, ability to omnichannel and monetize across a broader platform, brick-and-mortar, as well as digital. We are heavily into our loyalty push.”
At the moment, BetMGM Casino holds the advantage of MGM being a well-known retail brand with a cross-channel loyalty program. Caesars, however, shares the same advantages.
Another reason Hornbuckle mentioned loyalty programs is that Caesars Rewards has over 60 million members.
BetMGM, for its part, has access to data on more than 36 million gamblers via MGM’s loyalty program, M Life Rewards. To keep that retention cycle going, BetMGM enrolls all new customers in its rewards program.
Both entities market their respective online gambling apps to their databases. Caesars leaders can see how that has fed into BetMGM’s success. In Q1 2021, 44% of M Life’s new members arrived from BetMGM. Q2 was only a little lower, at 31%.
In Q1 2021, 10% of new BetMGM customers were already active with MGM. In Q2, it was 15%. Gross gaming revenue divided by the cost of acquiring those MGM-sourced customers, or the marketing return on investment, is 5.4 times that of other BetMGM users, according to Q1 2021 figures.
Caesars plays follow-the-leader
Because they have similar corporate backgrounds, Caesars is imitating BetMGM’s winning strategies. Its loyalty program is an important part of that too, with every new user getting automatically added to Caesars Rewards.
Ironically in May, Caesars CEO Thomas R. Reeg mentioned being inspired by BetMGM’s success in Michigan. He said that this had inspired Caesars’ push into online gambling and sports betting. Hornbuckle said on Wednesday that BetMGM’s iGaming market share in the Wolverine State is holding steady at 38%.
Focusing on acquisition for the moment, Reeg said on Tuesday that Caesars is activating its “entire workforce” to sign up new customers online and offline:
“Our frontline labor force will each have their own individual QR code, and will be able to sign up customers and be incentivized to help us do that.”
BetMGM is still adding customers, as well. In February, the operator had an iGaming market share of 25%. In this quickly growing industry, BetMGM now has a 30% market share.
BetMGM also counts on other channels for app engagement
BetMGM’s statistics look nice, but keeping gamblers playing – instead of abandoning their apps – is essential.
In Michigan, BetMGM picked up 38,000 new iGaming and sports betting customers in just ten days, from the market’s launch on Jan. 22, 2021, through the end of the month. Of course, it helps that Michigan is the home of the MGM Grand Detroit, a land-based casino with 100,000 square feet of gaming space. Yet what’s important to BetMGM now is how many of those app users remain active.
In order to keep bettors wagering, MGM is consistent about saying that its strategy is to engage customers in all channels. As the company stated in the 2020 MGM earnings report:
“Omnichannel customers are significantly more valuable compared to retail-only customers.”
The casino shutdown during the pandemic converted many retail gamblers into online players, and most of those have stuck around. At the same time, online players sometimes become retail casino gamblers.
MGM COO Corey Sanders said during the earnings call:
“When we talk about BetMGM and what it means to a property, our Detroit active M life customers in Q2 were actually up 40% from Q4 ’19. So we’re seeing that actual sign up in that market actually translate to bricks-and-mortar customers.”
FanDuel is still the overall market leader
FanDuel Group says its brands have more than 12 million registered users. As of March 2021, FanDuel reported having a “market shares of 40% in online sports betting and 20% in iGaming.”
Vanessa Simpson, a investor relations and corporate communications manager with Flutter, responded to OPR about FanDuel’s customer acquisition cost strategy for an article published in May. She said then that in Q1 2021, FanDuel saw more than 900,000 new customers come online, making the number of average monthly players rise to 1.6 million, a 132% year-over-year increase.
Simpson’s comments then relate to app engagement strategies via customer retention.
She told OPR in May:
“Once you acquire the customer, it is then important to retain them with your product offering.”
Simpson said then that FanDuel was already seeing the value of customer retention. During fiscal year 2020, $91 million in revenue came from customers FanDuel acquired during 2018 and 2019 in Indiana, New Jersey, Pennsylvania and West Virginia.