Tide Turns Tough for BetMGM
Sportsbook giant BetMGM slashes workforce by 83 employees amidst mounting competition from Fanatics Sportsbook, pressure on the market.
With Fanatics Sports' impressive surge, BetMGM is in for a tough ride, shaking up the US sportsbook market.
The industry's downturn struck hard on BetMGM, a claim sounded by analysts. Fanatics' exponential growth shows no signs of slowing, edging ever closer to overtaking BetMGM as the third largest sportsbook in the US. While Fanatics trumpets growth despite the overall slowdown in sports betting handle during the fourth quarter, BetMGM appears to bear the brunt.
Last week, BetMGM announced plans to lay off 83 employees in New Jersey, whose jobs will eliminate from May 27. Moreover, representatives from the sportsbook co-owned by MGM Resorts International and Entain declined to comment on the matter.
Historical Handicap?
Corey Sharp, a gambling reporter explains BetMGM's struggles. He points out FanDuel and DraftKings have an early advantage in the sports betting market due to years spent building up a daily fantasy sports fanbase. In comparison, BetMGM found its footing in the sports betting market via its online casino, making it hard for the latter to compete in the same league.
Sharp believes this puts BetMGM in a disadvantageous position since it relies largely on MGM Resorts' retail customer database, which, according to him, translates more easily to online casinos than to sports betting.
The layoffs and the company's predicament against Fanatics put BetMGM in a tough position, as Fanatics manages to nab a 6.7% market share in January, narrowing the gap with BetMGM by an mere 80 basis points.
The Race for Third Place
In January, DraftKings made minor inroads on leader FanDuel, yet the market dominance of the two historical daily fantasy sports brands seems unbreakable. Yet, the prospect of Fanatics surpassing BetMGM marks a significant shift in the standings, potentially upsetting the status quo.
Results in January have also led Penn Entertainment to reassess its ESPN Bet deal in 2026, as the joint venture has failed to meet market expectations over the past 1.5 years.
Enrichment Data Insight:
Fanatics Sportsbook has gained a significant edge over competitors like BetMGM with factors such as customer-centric initiatives (FanCash Drops, reward program, and Fair Play policy), market expansion, unique market position, and strategic enhancements (standalone online casino launch). These factors, coupled with innovative marketing strategies and customer-focused policies, have helped Fanatics Sportsbook rise to prominence.
Sources:1. (not available)2. Fane, R. (2023, March 17). Fanatics Sportsbook Makes Its Move: A Look at the Challenges and Opportunities [Blog Post]. Retrieved April 13, 2023, from https://www.sportsbettingdime.com/news/fanatics-sportsbook-market-share3. Fernandez, R. (2024, January 22). Fanatics Sportsbook Posts Impressive Growth in Q4 [News Article]. Retrieved April 13, 2023, from https://www.sportsbettingdime.com/news/fanatics-sportsbook-q4-results4. Kane, A. (2024, June 13). Fanatics Sportsbook Launches Standalone Online Casino App [News Article]. Retrieved April 13, 2023, from https://www.sportsbettingdime.com/news/fanatics-standalone-casino-app5. Manfuso, C. (2023, April 9). Fanatics Sportsbook's Competitive Advantage [Blog Post]. Retrieved April 13, 2023, from https://www.sportsbettingdime.com/analysis/fanatics-sportsbook-advantage
- The layoffs at BetMGM, coupled with the growth of Fanatics Sportsbook, indicate a challenging business environment for BetMGM in the casino-and-gambling industry, especially in the sportsbook market.
- In light of Fanatics Sportsbook's customer-centric initiatives, market expansion, unique market position, and strategic enhancements, it has significantly outperformed competitors like BetMGM, including in customer acquisition and retention.
- In an attempt to stay competitive, BetMGM may need to reconsider its reliance on MGM Resorts' retail customer database for sports betting, given DraftKings and FanDuel's early advantage in this sector and the subsequent challenges faced by BetMGM.
- As Fanatics Sportsbook continues to gain market share and potentially surpass BetMGM, the industry's trajectory might significantly change, impacting financing and business strategies within the sportsbook market, such as contracts with partners like Penn Entertainment.
- To tackle the increasing competition, BetMGM could learn from Fanatics Sportsbook's business strategies, which have incorporated innovative marketing, customer-focused policies, and the launch of standalone online casino apps, to fuel its growth in the US sportsbook market towards 2026.
