Will top sports betting operators start to offer worse odds to their customers?

Barry Jonas of Truist recently reviewed data from the analytics company, HoldCrunch. Former FanDuel VP Tom Johnson founded them. Their main objective is to look at betting odds in relation to the player According to Jonas, DraftKings and FanDuel might have to offer a worse betting product to help offset cost increases like the raised betting tax rate in Illinois. Given their place in the sports betting market. DraftKings and FanDuel have the luxury of being able to “tweak pricing.”

If the industry leaders offered worse odds to their customers, that would help other operators earn a new portion of the betting handle. Pricing has its negatives and positives, leading to these top industry operators having to make tough choices. Lower odds on a sportsbook certainly attract more customers but it fails to monetize them correctly. On the flip side. Higher odds could drive customers to other sportsbooks despite DraftKings and FanDuel’s superior betting products overall. Major sportsbooks may have to sacrifice taking losses in certain markets knowing they can make up the money in another state.

What sportsbooks have seen the most success over the last year?

Truist’s Barry Jonas noted that Flutter’s FanDuel offered their most competitive pricing in the second quarter of 2024. However, Jonas’ biggest takeaway from the data he analyzed was that BetMGM and Fanatics are highly competitive in the market. Additionally, he noted that BetMGM and Fanatics are closer to leaders like DraftKings and FanDuel than in Q2 of 2023. Based on HoldCrunch’s data from 2023, DraftKings offered their best pricing in Q2 of 2023 as well. However, they now trail behind FanDuel, ESPN Bet, and BetMGM.

DraftKings relies on its superior product to keep its customers around and not use other sportsbooks. Management offers less competitive pricing and it has led to accelerated profits. The industry leaders still need the support from their loyal customers. Caesars Sportsbook was competitive throughout 2023, however, they took a dive in Q4 of 2023 and the first quarter of 2024. Barry Jonas noted that Caesars may have to raise their prices at the expense of losing their betting handle share. Caesars president of digital Eric Hession said their betting market is now competitive enough to retain loyal customers who use their Caesars reward program.