Here's why Super Bowl gambling might look different this year

An estimated $16 billion will be spent on Super Bowl betting

·5 min read

Super Bowl LVII has been tabbed as another record moment for sports gambling operators.

This year, though, an industry that’s been known for giving away the most free money to attract new customers is suddenly focused on how to make the most out of customers they already have.

“We've got to transition from this insane customer acquisition strategy,” Joel Simkins, managing director of investment banking at Houlihan Lokey focusing on gaming, told Yahoo Finance. “I think everyone gets that joke, 'we're in 2023, just going out Willy Nilly and acquiring customers,' [but] you've got to do more with who've you got now.”

Wall Street analyst Chad Beynon noted that most sports betting companies "are done with playing games after the first six months."

“The first six months is that huge acquisition period," Beynon told Yahoo Finance, "but now they're kind of operating by a similar type of playbook where the best product and the best loyalty and branding really should win after that first six- or 12-month trial period."

Why sports betting operators are turning inward

The American Gaming Association is estimating that Americans will gamble roughly $16 billion on the big game through both legal and illegal means.

Industry market share leader FanDuel is predicting it will handle over 17 million Super Bowl bets this year, a more than 400% increase from 2021.

Three more states have legalized sports gambling since last year's Super Bowl, bringing the total to 33 states and the District of Columbia. Eight other states currently have active legislation or ballot initiatives aimed at legalization, according to AGA. However, California’s most recent shot at sports gambling flopped, and legislation in Florida fell flat.

On top of that, the race toward the top of the sports gambling hierarchy has proven pricey.

Profitability concerns have consumed earnings calls for American-based mobile sportsbook operators like DraftKings (DKNG), Caesars Entertainment (CZR), MGM Resorts (MGM), Penn National (PENN), and Wynn (WYNN).

DraftKings, which is set to report fourth-quarter earnings on Feb. 17, has already reported a $671.8 million adjusted EBITDA loss through the first three quarters of 2022.

Philadelphia Eagles fans gathered on the steps of Montgomery County Courthouse for a pep rally in advance of Super Bowl LVI on February 10, 2023. (Photo by Mark Makela/Getty Images)
Philadelphia Eagles fans gathered on the steps of Montgomery County Courthouse for a pep rally in advance of Super Bowl LVI on February 10, 2023. (Photo by Mark Makela/Getty Images)

Its competitor Caesars Digital unit, which includes Caesars Sportsbook, reported a $661 million loss in the same category for its first three quarters of the year.

Most of those losses for Caesars trace back to the first quarter of 2022 when the company lost $554 million. Caesars promoted heavily leading up to last year’s Super Bowl, offering system credit match up to a deposit of $3,000. The operator also added a $300 bonus, meaning if a user deposited $3,000 into their account, they would have $3,300 of free play money courtesy of the sportsbook.

This helped Caesars gain early market share, but it didn’t translate to sustained success. The company started the year ahead in monthly gross gaming revenue, per the New York State Commission, but finished 2022 handily in third place.

"We're going to target our promotional spending at our profitable customers, which is going to be a much smaller subset of that larger group," Caesars CEO Reeg told investors after the first quarter.

'It's going to continue to grow'

Since adding customers at any cost hasn’t proven to be a sustainable model, industry leaders are steering customers toward areas where their sportsbook stands to profit more handsomely.

Sportsbooks are heavily promoting their live betting offerings. Throughout the NFL playoffs, multiple sportsbooks offered boosted live betting odds, meaning the customer stands to make more than normal. PointsBet took its live betting promotion as far as to fake strike former NFL quarterback Drew Brees with lightning to promote its live betting arm known as “Lightning Bets.”

"I think it's as you go through that experience, as a bettor or someone who's engaging in the betting experience, you become more accustomed to that and you just change your behaviors because you know you want to be in the action all the time from an instant perspective," PointsBet COO Jake Williams told Yahoo Finance.

The average hold rate, or percent of money sportsbooks keep money on bets, is just over 7%, according to That increases to 10-15% with in-game bets and same-game parlays.

According to PointsBet, more than half of its NFL betting handle during the regular season came from in-game bets. The operator is anticipating 40% of its Super Bowl handle to come from in-game betting on Sunday.

Many industry experts are projecting the live market could grow as large as 75% of the total money spent gambling in the U.S. That would match Europe's numbers where sports gambling has been legal for decades.

"Live betting continues to increase," DraftKings CEO Jason Robins told Yahoo Finance. "Whether we get [to 75%] or higher or lower, I don't know, but I think it's going to continue to grow. I think more and more people are starting to see that you can make that during the game."

Josh is a reporter and producer for Yahoo Finance.

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