How are tribal operators responding to the ever-growing influence of commercial operators across the country?
Tribal gaming has been an integral part of the wider US casino landscape since the Indian Gaming Regulatory Act was passed in 1988, with revenue growing year-on-year for the last decade and now accounting for approximately 45% of all gaming takings. Even with the pandemic, collective gross gaming revenue from tribes was still $27.8bn in 2020, which shows that the tribal gaming market remains robust. Since the repeal of PASPA in 2018, sports betting has exploded across the US and tribal operators across the country have been assessing the best way to introduce this new vertical to the benefit of their community.
With that in mind, what opportunities can commercial brands present to longstanding tribal operators?
Tribes effectively have two options when it comes to launching a sports betting operation: they can either partner with a B2B supplier or they can work with an established B2C sports betting brand. Selecting the right route to market is crucial, but it’s important to stress that neither option is right or wrong. For some tribal operators, partnering with a B2C company with national brand recognition could be the most effective strategy as they can then leave the day-to-day management of the sportsbook to their partner and have a shared database. However, this does mean tribes lose out on potential cross-sell opportunities at their casino. As well, they have to pay a far larger revenue share compared to B2B. Having said that, introducing a new product vertical on property isn’t a light undertaking. By working with an established B2C brand, tribal gaming operators are in a position to benefit from the experienced sportsbook marketing and operational expertise of the operator.
Conversely, how do you think tribal operators can compete with these commercial giants?
At Kambi, we believe the strength of the sportsbook product itself will ultimately be the determining factor for success in the US market, including tribes. However, operating a high-performance sportsbook is a huge challenge on a structural and technical level, and few operators are in a position to build their own technology and platform. We understand the value tribes place in long-term thinking and trusted partnerships. By working with an end-to-end B2B sportsbook partner, tribes can most effectively compete with these commercial giants.
Partnering with a specialist B2B sportsbook is an attractive option for those tribal operators that have confidence in the strength of their brand and want to maintain full control of their customer database. Tribal operators including Seneca Gaming Corporation, Four Winds Casinos and Desert Diamond Casinos have launched sportsbooks in partnership with Kambi.
How will the new legalization of sports betting in New York affect the state’s tribal operators?
Since going live in early January, New York State has become the biggest online sports betting market in the country, and there are some eye-watering figures being initially reported. However, much of this growth is being driven by extremely generous bonuses and sign-up offers. This includes what impact it will have on tribal operators in the state. However, Kambi believes the operators most likely to succeed in the long term will be those that have a high-performance sportsbook product.