CINCINNATI — How eager are online sports books to claim Ohio customers? At least one announced its first promotional offer before it applied for a state license to take bets on mobile phones.
“You can download the app now, and if you register before August 1st, you’ll get $500 in your account when we launch,” said John Koller, chief marketing officer for Hard Rock Digital, an online sports book launched by Hollywood, Fla. -based Hard Rock International in 2020.
The #FOMOPROMOH campaign has some built-in urgency: The amount of the bonus declines by $100 a month prior to Ohio’s formal launch on January 1, 2023. Gamblers are required to bet at least $100 within 14 days of launch.
Koller said the goal of the campaign is to develop customer loyalty with bettors by offering concert tickets, casino perks and other experiences with yet-to-be named marketing partners, which may include local sports teams and athletes.
It’s an “opportunity to become involved in a lot of the other entertainment parts of Hard Rock,” Koller said. “That’s the exciting part. That’s where I think we can shine as a brand.”
The Hard Rock bonus could be a sign that sports books will temper their spending in Ohio, compared to other states that launched in the last two years. In New York, Caesars Sportsbook offered $300 in free bets and a 100% match on new deposits up to $3,000. Ohio offers are expected to top out at $1,500, according to BetOhio.com.
“Throwing thousands and thousands of dollars up front really creates disincentives to retain” customers, Koller said. “It increases the opportunity for others to kind of bonus hunt. And many times, external books, books not named Hard Rock, have noticed that they have not retained their customers well.”
Caesar’s Entertainment Corp. CEO Tom Reeg told investors in a May 3 earnings call that over $400 million in first-quarter losses were “attributable to the launches in New York and Louisiana with New York the lion’s share of that.” When Caesar’s cut $250 million from its marketing budget in February, its share of all bets made in New York dropped from about 40% to 15-20%, he said.
Draft Kings Inc. CEO Jason Robins told investors in a June 6 conference call that he’s “focusing on efficiencies more than we have been, not just with marketing but with everything.” DraftKings posted a $467 million loss in its most recent quarter, thanks in part to sales and marketing expenses of $321 million. He said competitors engaged in “unsustainable, irrational behavior” to claim customers last year, but that started to change in the last six months.
“The overall market has changed a lot,” he said. “Now, it’s all about profitability.”
Online gambling companies spent $413 million in the first 10 months of 2021, up 62% from the prior year, according to Media Radar. Flutter Enertainment plc, which owns the FanDuel brand, led the pack with its $204 million budget, followed by DraftKings at $147 million and Caesar’s Entertainment at $77 million.
Koller didn’t provide details on his marketing budget, but offered some insight on how the brand plans to engage with Ohio customers.
“What if we offered you tickets to a concert or what if we were able to bring you along to a lot of the Hard Rock opportunities at the property in Cincinnati?” Koller said. “All those things count as promotional offers but they’re not just throwing $5,000 at you. They’re giving you personalized experiences that you may love. Those are things you can expect from Hard Rock."
Koller hopes to announce marketing partnerships in the next two months with sports teams that could expand the list of “experiential” offers to Hard Rock’s loyal customers. He declined to name potential partners
“We’re still going through the negotiation process, so I don’t want to lose leverage here, but you know there’s a couple of very strong universities and a couple of great teams,” Koller said. “We’re talking to all of them.”
Hard Rock is also looking to expand relationships with local athletes, patterned on the recurring visits that Cincinnati Reds legend Pete Rose has made to the Cincinnati casino.
“When you think about people like that, that are really strong in the community, we love to tie in with athletes or ex-athletes that have a real strong standing in that particular city,” Koller said.
But that won’t keep bettors from shopping for the best offers.
“I’d be willing to try whatever makes sense,” said Nick Anderson, a Greenville, Ohio resident who visited Cincinnati for the Reds-Dodgers game June 23. “Right now, I use Draft Kings primarily. Just because it’s the easiest.”
Ohio could have a crowded market for online operators, with up to 25 licenses available for mobile platforms. BetMGM and PointsBet both applied for licenses on the first day Ohio accepted applications. Kohler said Hard Rock Digital will definitely apply and the industry’s major players have indicated they will compete in Ohio as well.
Gamblers can expect a variety of promo offers in Ohio, including risk-free bets, boosted odds, deposit matches and VIP rewards, according to BetOhio.com. Those who download an app should read the terms and conditions, as many offers come with strings attached, including playthrough requirements.
“It refers to a situation where a sportsbook requires that you bet the bonus amount a certain number of times before you can withdraw those funds,” wrote Julian Miller, in a BetOhio blog post. “Let's say a book has a 100% deposit match program up to $100, but with a 5x playthrough (or rollover) requirement. You deposit your $100, and now your account shows $200. However, when you take the 5x rollover into account, you actually have to bet $1,000 ($200 x 5) in total before you can withdraw any funds from your account!”
