Can Sky Bet’s Business Model be Duplicated in US Market?
Strategic partnerships between media companies and sports betting operators are very common these days. Everyone is trying to get a piece of the emerging legal sports betting industry in the US. Just about every major media outlet has ties to an official sports betting partner.
Turner Sports was a bit late to the party as the parent company behind the popular sports site Bleacher Report. Back in October, the company added both DraftKings and FanDuel as official sponsorship partners.
The growing relationship between media heavyweights such as ESPN, FOX, NBC and CBS and sportsbooks can be traced back to the origins of these types of strategic alliances.
In 2000, UK broadcaster Sky bought a small telephone and online sports betting company known as Surrey Sports. Two year’s later, it was rebranded as Sky Bet. This grew to become one of the biggest and most successful sports bookmakers in the UK.
While it appears that the large US media companies are also moving in that direction, questions remain concerning long-term success. The reason why is the Sky Bet business model.
US media outlets are affiliating their brands with up-and-coming books such as DraftKings and FanDuel. Sky broadcasting created its own sports betting entity.
Common goals as a true business partnership were the primary keys to Sky Bet’s eventual success. The US version could be considered a hybrid model. Media companies and sports betting operators share common interests. This falls short of a partnership that keeps each other’s interests top of mind.
The business background of any media company is vastly different from the business background of a sports gambling entity. Many of the latter come from a casino background such as BetMGM. DraftKings and FanDuel started as popular daily sports fantasy league sites.
US partnerships between the two lack the necessary common ground to form something along the lines of Sky Bet. Most of these deals come down to sponsorship opportunities for the various media brands. The sports betting operators have paid for those rights as a way to expand their market share.
One partnership that may come closest to the Sky Bet business model is Barstool Sportsbook. This was the result of Penn National Gaming’s equity stake in Barstool Sports as a very popular digital media company. Working together, they launched the Barstool Sportsbook app.
Another good example would be Fox Bet. Once again, the actual media outlet is closely associated with the mobile sports betting app.
Another thing to keep in mind is Sky Bet’s trajectory to large-scale success. It took more than a decade of hard work and dedication to growing this brand. Records show that total revenue in 2010 was less than $130 million. The estimated revenues for 2020 could top $1.2 billion.
A few of the most successful growth tactics centered on acquiring casual players. There was also a strong push to advance mobile technology. You can never downplay the impacts of being first to market in today’s world a rapid change.
Most importantly, Sky Bet focused on the core business of sports betting. This was not a media company looking to expand its presence into this particular business segment through an existing operator.