Expect Bet365 To Make Waves In Kentucky, Expert Says

Written By Steve Schult on August 10, 2023
Bet365 shakeup in Kentucky

Two companies dominate most sports betting markets.

FanDuel and DraftKings usually snatch up most of the market share in most states. A Lexington-based gaming expert believes the upcoming Kentucky sports betting industry will share the same fate.

However, he thinks Kentucky will be the breeding ground for a big shakeup in the second tier of online sportsbooks. After the top two companies, BetMGM and Caesars Sportsbook typically grab most of the remaining business. Several smaller operators usually chop up the last sliver of the proverbial pie.

In the Bluegrass State, Chalkine CEO Daniel Kustelski believes Bet365 will join the two Las Vegas-based gaming giants, creating a new second tier in online sports betting.

Chalkline helps gambling companies acquire customers through free-to-play sports betting applications and games. As sports gambling becomes more prevalent throughout the US, Kustelski’s company helps educate potential bettors and lower the cost of customer acquisition for clients.

In other words, few people understand the online sports betting landscape like Kustelski.

Bet365’s Ohio success points to similar outlook in Kentucky

At the time of the interview, the London-based Bet365 hadn’t made any concrete plans about entering the Kentucky market. That changed Thursday afternoon when Gov. Andy Beshear revealed the list of applicants for online licenses, which included Bet365.

Even without the announcement, Kustelski thought Kentucky bettors would eventually have access to a Bet365 Kentucky platform.

“But I have a sneaking suspicion that they’re probably going to be here from day one,” he said.

There was plenty of evidence to support Kustelski’s hunch.

Bet365 already has a Pennsylvania online casino partnership with Churchill Downs Inc. Additionally, analysts at Eilers & Krejcik Gaming ranked Bet365 as the fourth-best app in the US, ahead of both BetMGM and Caesars Sportsbook.

More importantly, the United Kingdom’s largest sportsbook recently made serious headway in Ohio. It handled more than $32 million worth of sports wagers in the Buckeye State in May.

That translated to a 7.5% market share, more than $4.4 million in revenue and good for third in the state.

In a summary of the Kentucky industry, Eilers & Krejcik predicted FanDuel and DraftKings would garner 75% of the state’s market share. Kustelski thinks those predictions are probably accurate, but Bet365 will cause a shakeup in the next group of sportsbooks.

“I think we’re going to start to see changes in the second tier of market share,” Kustelski told PlayKentucky. “Seventy-five percent for DraftKings and FanDuel sounds about right. But who’s in that second tier might start to change a little bit.”

Kentucky landscape likely mirrors Massachusetts

The legislation legalizing sports betting in Kentucky allowed for up to 27 online sportsbooks in the state. Every land-based licensee can partner with up to three companies for its online sports betting operations.

But Kustelski doesn’t think there are anywhere near that many Kentucky online sportsbooks.

Kentucky Horse Racing Commission members met with Massachusetts regulators earlier this year to discuss the best sports betting practices. Ironically, Kustelski thinks the Bay State is a good comparison for this metric.

“I see it a little bit more reserved and probably on par with how many (sportsbooks) launched in Massachusetts,” Kustelski said. “That’s less than 10 and feels about right. But I do think we start to see changes to that second tier. Maybe Bet365 comes in and secures a decent market share.”

Expect loyalty programs to play a key role

Aside from the market share shakeup, Kustelski believes integrating loyalty programs could be a key driver for Kentucky operators.

According to Kustelski, 50% of new BetMGM rewards members came from engagement with its sports betting platform. Thus, he expects Caesars Sportsbook Kentucky and BetMGM Kentucky to integrate loyalty programs into Kentucky online sportsbooks.

On the surface, this would give the two operators with nationwide land-based casino operations a leg up on the competition. In other states, rewards points generated from online gambling can be redeemed at brick-and-mortar casinos for food, hotel or other experiences at first-rate casino properties.

And while some casinos are in neighboring states, Kentucky has no land-based casinos. Furthermore, Kustelski expects the venues with historical horse racing machines to integrate their own rewards programs with their online betting partners.

HHR venues know loyalty programs

HHR machines are Kentucky’s version of slot machines. They give the bettor a similar experience, but the results of the spin are based on the results of past races. Not sheer chance.

Churchill Downs applied for retail licenses at all its Kentucky venues. Most of those locations are centered around HHR machines, not actual horse tracks.

As a result, we could see bettors using CDI-partnered online sportsbooks generate points toward a local HHR venue.

“They understand the importance of loyalty and getting people to sign up,” Kustelski said about HHR operations. “If they can start to tie some of those things together, I think there’s a possibility that the HHR operators with a large database can leverage it effectively and possibly make one plus one equal three.”

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Steve Schult

The Managing Editor of PlayKentucky, Steve Schult is a veteran of the gambling industry with more than a decade of experience covering the space. After earning his journalism degree from Marist College, the New York native began covering high-stakes poker tournaments and the U.S. gambling industry for various outlets. Following stints as a writer for Card Player Media, Bluff Magazine and the World Series of Poker, Schult joined Catena Media and has managed coverage for a handful of states.

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