Despite sportsbooks’ reputation for carrying a low profit margin, operators can enjoy significant revenue by being smart about their audience and investing in technology that makes betting easy, a panel of experts said Monday at the Global Gaming Expo in Las Vegas. Operators also should look at the big picture, because the addition of sports betting can bump up revenue from table games, slot machines, and food-and-beverage sales. 

“Sports (betting) brings in a certain demographic,” said Kevin Vonasek, vice president of business development for SG Digital Americas. “It gives tons of ways to monetize them on the other side. You’re going to win some, lose some on sports, but you’re going to have a much more stable business on the casino side.” 

Vonasek spoke Monday afternoon as part of “Encouraging Crossover: Monetizing a Low-Margin Product,” which also included Steve Fenic, a professional gambler and handicapper known as Fezzik, and Christina Thakor-Rankin, principal consultant for 1710 Gaming.  Brandon Loeschner, a national gaming practice leader for accounting firm RubinBrown LLP, moderated. 

Loeschner noted that New Jersey casinos’ table game and slot machine revenue each increased by more than 10 percent after the state added sports betting. 

“That’s not because players are coming in and just placing their sports bets,” he said. 

Thakor-Rankin said that, since sports betting appeals to such a wide variety of people, operators neetd to decide which groups they most want to attract: casual players, high-risk skilled players like Fenic, or a combination of several types. 

“Technology is key,” she said. “You need to understand your customer and what they’re likely to do before you start pushing different products. Your ability to capture data and interpret it intelligently is huge.” 

Technology also is crucial to providing in-play betting, which Thakor-Rankin described as the most popular form of gambling everywhere it is permitted. Operators can’t afford to frustrate in-play bettors with technology too slow to handle the action, she said. 

Fenic said the sports futures market is one source of high-margin wagers for operators. In tournaments such as NCAA’s March Madness, only one team comes out on top, but Fenic said Las Vegas sports books have offered pre-tournament odds that would yield a 58 percent theoretical hold if a player bet on each team to win the championship. 

Fenic also suggested that sportsbooks look for events that grab attention, such as the Nathan’s Fourth of July hot-dog-eating contest at Coney Island. For instance, will champion Joey Chestnut break his own record this year by downing 75 hot dogs? 

Thakor-Rankin said U.S. politics might offer the best topic for sportsbooks to take bets on, with Vonasek quipping that more people would make such a bet than would vote in the election. 

Vonasek went on to say that the next hurdle for sportsbook operators is developing a unified wallet and interface. 

Operators want to move ahead with such developments faster than regulations permit, Thakor-Rankin cautioned. She recommended that gaming officials seize the opportunity and explain that they want to work with regulators to bring the black-market sports-betting business into the regulated sector. 

Fenic said he wouldn’t necessarily classify American sportsbooks as low-margin operations, even though the house advantage is traditionally around 4.5 percent. He noted that European exchanges put bettors together and take 1 percent of the handle. 

He said operators shouldn’t read marketing and financial reports to find out how their sportsbooks are doing. Instead, he said, they should “go and bet.” He encouraged them to try to making bets just before the Monday night NFL game, during it, and directly afterward.  

“See what your experience is like,” Fenic said. “It’s a matter of providing customers with the best products and service. (Do that) and they’ll stay with you.” 

This article is a reprint from CDCGamingReports.com.  To view the original story and comment, click here.