00:00Jim Ghazali joins us now to go over the latest on Michigan. We'll talk about Fanatics' footprint
00:09there, but let's start off with ESPN Bet, Jim. And we've had contributors all week long from
00:14Legal Sports Report talking about some of the numbers coming in from ESPN Bet. Simply put,
00:20it's showing that some moderate success, but also proving that you can't just throw a logo
00:24on a sports book and assume that you're going to cash in. Am I wrong?
00:30No, you're absolutely right, Craig. And I think the executives at Penn Interactive,
00:37Penn Entertainment are realizing that now, as we've seen over the last couple of months,
00:44just in various markets, the amount of handle that they're generating in relation to a lot of
00:54their other competitors. And coming out this week, we got a look at the revenue and handle figures
01:01in Pennsylvania for May. And what stuck out to me, and not surprisingly really, is that the amount
01:08of promotional dollars that ESPN Bet offered its Pennsylvania customers reached its lowest point
01:16since ESPN Bet took over for Barstool Sportsbook back in November. And it's not terribly
01:24surprising, Craig. As we see each year around this time in the calendar, those promos tend to
01:33drop off as we're out of football season. You've got just the NBA and NHL finals going on.
01:43Baseball is really the main thing on the menu. So those promo dollars do typically
01:48tend to fall off. $1 million was the promotional spend for ESPN Bet in Pennsylvania in May. And
01:57that's been a consistent downward trend since they launched ESPN Bet in November. February was $2.1
02:06million. March, $1.7 million. April, $1.6 million. And like I said, May, just that $1 million.
02:13When they launched back in mid-November, it was nearly $15 million that they offered up. And
02:21Penn CEO Jay Snowden said that he was even surprised, talking about it on a national level,
02:26just at how much of a response there was to the new ESPN Bet offering. And
02:35they did not anticipate giving out as many promotional and sign-up bonuses
02:40as they did. The interesting thing to me, though, since that November total through May,
02:46$31.2 million in promotional spending for Penn in Pennsylvania. And in return,
02:53they've generated $30.1 million in revenue. So that promotional spend outweighing what they've
03:00made back in winnings off of players, obviously, before being able to deduct that for tax purposes
03:06in Pennsylvania. But just an interesting nugget there to wrap up Pennsylvania in May, Craig.
03:12All right. Thanks very much for that update. Let's move on now to Fanatics and talk about
03:17their foothold in Michigan. Looks like they are doing pretty well. And obviously, they used to
03:22be points bet there. But since being bought out by Fanatics, all over the country, they're starting
03:27to see some significant increases, which is good news because, again, there's really no football
03:33going on right now. So with these other sports to bet, and especially in a state like Michigan,
03:38where the Tigers are middling and the Pistons did not have a good year, this is something that's
03:43probably a positive development for them. Yeah, I thought it was pretty positive and
03:48quite interesting, too, to see just they've had a steady run over the last couple of months.
03:55Like you said, Craig, Fanatics took over that points bets license in Michigan towards the end
04:02of February. So let's just say, for argument's sake, that they were operating as points bet
04:09in February. They had 2.3% of market-wide handle in February. And that's just increased
04:18and stayed steady since they made that switch in March. March, 4%. April, a little bit less,
04:243.6%. But in May, 4.1% of overall handle in Michigan for Fanatics. So overall, a positive
04:34trend to see that brand kind of elevate them a little bit in terms of generating a consistent
04:42amount of handle. They had a little bit more than $14 million in overall handle did Fanatics
04:50in Michigan for May, and they were able to generate $1.8 million in revenue. So obviously,
04:58there are some other major players that we all know about in that market. And just like in most
05:05every other market, FanDuel and DraftKings seem to have a bit of a stranglehold on Michigan.
05:14Though, I do think with that brick-and-mortar casino in Detroit with the MGM brand,
05:22BetMGM does tend to do quite well in Michigan, all things considered. But certainly to your
05:27earlier point, Craig, Fanatics and the ability to take over for points bet and have a steady run
05:34over these last couple of months there in Michigan, I think is a positive sign as we get through
05:40the summer and we'll see what they're able to do with a full start to college and NFL betting
05:48on the horizon for Fanatics. Yeah, and just a couple of months away in terms of college
05:53football here coming up in August. So I believe it's almost exactly two months to the date.
05:58All right, now let's get to Indiana and talk about the betting shares going around there.
06:03BetMGM, Bet365, Caesars, three predominant sportsbooks there, all seeing moderate rises
06:10in their handle. What do you attribute that to? Yeah, and the increases aren't much, Craig,
06:17to be honest with you. But what was interesting to me was just that they were able to not only
06:24grow their share of handle within the market, but they were also able to increase their overall
06:30handle from April to May, which we don't typically see, you know, like we were talking about with
06:36the promo dollars in Pennsylvania tending to drop off this time of year because there's there's just
06:41not as much to bet on. Overall, betting tends to to follow the same sort of path. So I was,
06:50you know, pretty surprised to see that MGM, Bet365 and Caesars not only grew a little bit of
06:57market share in handle for May in Indiana, but just from a pure month over month, dollars to
07:05dollars, they were able to to increase a tad bit there as well, which I thought was a pretty
07:11positive sign. And like we talked about with this Indiana market a couple of weeks ago, Craig,
07:18you know, I think what we've really been waiting to see Indiana do is return to those 2022 handle
07:26levels. Twenty three, they had the increased competition from Ohio to start the year and then
07:33with Kentucky coming online towards the end of September last year, just a couple of differing
07:40market factors created a little bit of volatility in Indiana, but they were able to kind of shrug
07:46that off and show some year over year growth to start the year. But within these last two months,
07:52we've seen those handle figures overall in the market really return to those 2022 levels,
07:58which I think is a pretty positive sign for them. So three hundred and sixty one point six million
08:03dollars overall bet in in May in Indiana, which is pretty significant when you look at those 2022
08:14numbers, which were, you know, in that two hundred and eighty to two hundred ninety million dollar
08:19range. So overall, I think positive signs for for Indiana, given the increased competition from
08:26Ohio and Kentucky that they faced last year. But returning to those those levels two years ago,
08:31I think is a pretty positive sign for that market overall. Yeah, sure. And look, no college
08:37basketball going on right now, of course, for those folks in Indiana. Indiana Pacers had a nice
08:42run. That's part of it as well. People interested in sports. But needless to say, we'll see how they
08:47do in football season as well. Jim, thanks again for weighing in and appreciate you coming on.
08:51We'll catch up with you next week. All right. Thank you, Craig.
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