Josh Walker 

Hi, everybody, good afternoon. All well fed and back from lunch. We have been very busy this morning, bringing you different content from the fan experience, to listening to how the NFL is innovating. And now it's time to turn our attention to a topic that is one of the most popular areas of research that we do at the sports Innovation Lab. If you look at our research across all trends, wagering East sports, gambling has been on the top of every executives mind because it impact strategies from everything from advertising to sponsorship video writes a great panel for you here this afternoon. And we've got a great moderator to lead this discussion. I'm going to bring out in a few seconds Jeff Ma, who's a consultant whose bio you guys should read everything from being on the infamous MIT blackjack team And and being a consultant across this industry to being able to ask our experts on this panel from MGM fanduel and others about what's happening in sports betting. So without further ado, please welcome Jeff Ma the panel to the stage. Thank you.

 
Jeff Ma 

So thank you guys for joining us. I think for many of us who've followed this industry for a while, people used to ask me all the time, when do you think sports betting would become legal? And I would always say five to 10 years, and I would just keep saying five to 10 years. And I said that 15 years and now, it's legal. If you guys don't understand what happened about what 18 months ago, they overturned pasmo, which was a federal ban on sports betting and allowed each state to basically decide whether sports betting would be legal in their state and since that time, I think it's what 21 states now have some form of legalized sports betting. So have some issues because of a lot of the lobbying power of the existing, you know, entities that have gaming. It definitely has had some friction along the way. And I think that'll be one of the interesting things that we can talk about today. I want to introduce the panel. The panel is a great collection of veterans in this industry, mostly from the operator side. So it'll be interesting to sort of take a point of view and challenge some of those notions, but I'd like to have you guys introduce yourselves and your role, and then also talk about what you think the biggest surprise has been in the first 18 months of legalization. So start with you, Scott.

 
Scott Butera 

Okay, thank you, Jeff. My name is Scott Butera president of all our sports betting activities, doing our retail sports books as well as what we do online with at MGM. The I'd say the The biggest surprise that I've seen in sports is a little bit of alluding to what about the five years is that just how many different factions have rallied to support sports betting. So the first time you have sort of this confluence of fans and legislators and sports leagues and teams all kind of rallying around sports betting and really seeing it as a source of value and driving fan engagement and customer experiences is probably been the biggest surprise for me.

 
Matt King 

I'm Matt King, and the CEO fanduel biggest surprise for me has been frankly, the size the illegal market. You know, prior to the legalization of sports betting it there were lots of research studies and everything else that came up with big numbers and abstract numbers. And when we launched we were very focused on creating educational materials for betters because we thought, hey, lots of these people will be new to sports betting. And what we found was probably nine out of the 10 people we were acquiring in the first six months in a state like New Jersey. We're all converting from the illegal market and so instead of their first That being a simple straight bet they'd walk up to the window and say, I want to do a five leg parlay on this, this, this and this. And we suddenly kind of put our educational materials in the back and hid them away because clearly they weren't needed.

 
Mike Primeaux 

And Mike Primeaux, I'm the SVP of product for Fox bet. And Fox super six. I would say the just the rapid pace of legalization, like you mentioned 21 states, but it was all but you probably know, five states had some form of bill at each state level. And so, you know, passcode repealed 2018 I think all of us would probably be shocked if we were sitting here beginning of 2020 knowing that 21 states have already legalized in some form, either be retail online Tombow. And knowing that on the agenda for 2020 basically every remaining state is still looking at it. Even some of the big ones California, Texas, even Florida, some of the ones that I think people thought would fall much later in the cycle seem to be active.

 
Sara Slane 

Hi, I'm Sara Slane. I founded my own consulting firm the summer, actually last summer because we're in 2020. Now, prior to that, I worked for the American gaming association which represented the commercial, tribal and supplier community of the casino gaming industry and led the campaign effort for legalization of sports betting. I guess I would just echo the sentiment here. I think the thing that's been most surprising is the pace at which this has moved. Having worked in gaming for 10 plus years now and worked on the legislative front. I'm absolutely stunned at how quickly legislators have been moving legislation. Certainly when it comes to the mobile component, that was an area which has been incredibly difficult for the gaming industry, but I think there was enough sort of softening of the ground with daily fantasy sports and the world Acceptance of sports betting that that that made that path a lot easier. So I think it'll be tremendously interesting to see now, how many more states are opening up the market and then those states that don't have mobile betting that go back and add it.

 
Jeff Ma 

So I would challenge you guys this notion that the idea that people move fast when they see dollar signs in front of them, right, which is what's essentially happening, right, there was this notion of like, it being, you know, like taboo, and once that taboo was removed, like everyone was pretty easily able to get over any of their, you know, when they saw the dollar signs. Now, that leads me to the next question, which is, how big are those dollar signs? Right? So how big I asked the panelists all individually, before we did this panel, what they thought the overall handle so the handle is the the term for how much total money is being bet in the industry. And then if you take that handle, you can do percentages of sort of margin and win and now get you to sort of the total Revenue. But the handle is the number that people talk about a lot. I asked them all what they thought the total handle would be in 2030. And we got a range of answers. Everything from I'll say that years now it was around 150 200 billion, right? So everything from about 80 billion to Sarah, who weighed in at 500 billion. Now, Sarah probably weighed in there. Right? So we need to, like, sell people on this, but but how does it get to? How do you get to 500 billion?

 
Sara Slane 

It's a really good question. I was sort of half joking, because I remember when we were framing this argument back in 2015, and we were talking about the size of the illegal market, and we were trying to do research on it. And let me just tell you, it is impossible to actually calculate illegal activity, people are not necessarily going to fess up to the fact that they're doing that. So we looked back and tried to figure out you know, what can we base this off of and we looked at Nevada's numbers and said, okay, he took that over a course of a couple years multiplied at times 50, you get 250 billion dollars. There were estimates as high as $500 billion in the illegal market. I think that's probably very, very ambitious. But you know, who knows, I there are so many hurdles, though, that would stand in the way of reaching that 500 billion number, including tax rate, including be able to offer mobile, including the fact that we have a law a federal law in place right now, that only allows you to do this on an intrastate basis, you cannot do it on the federal level. So that is certainly a huge hurdle to overcome to reach that kind of number. I can

 
Scott Butera 

actually comment on that a little bit, because it's kind of how you view the market, you know, so in our case, we, you know, we look at sports, maybe 100 to $200 billion, you know, handle market in and of itself, but we really see sports as a portal to a lot of related businesses, so, you know, an MGM sports and then we provide You know, what we say is things that people that like sports like so, sports is a way to create, you know, more fan engagement experiences around sporting events that you can enhance. You know, we host a lot of professional events here like NBA Summer League and and we've been smelling like the Golden Knights of the Raiders and you know, other other ways in which people can enjoy sports betting as part of an overall experience, which creates a much broader market than just the actual building itself.

 
Jeff Ma 

Yeah, so I mean, I think that's, that's getting ahead of this conversation, right like that. At the core, we started saying like, okay, all these states are going legal, and it's because they want they see big dollar signs attached to, you know, taxing this and regulating it, etc. Then we look at this overall handle size, and these numbers that you guys even thrown out are much higher than I think that I've seen from you know, this is very optimistic, right. So how does the handle grow to that size? Sarah, you're you're quoting numbers of the illegal grey market. And the reality is, I'm not sure if you're going to be able to convert a high percentage of those people because of the ease that you can make. I mean, I think that everyone in this room that doesn't bet would be surprised at how easy it is to make an illegal bet right now, and how seamless the processes and how the customers all that stuff, right, so like, how does this handle actually grow to say 500 billion?

 
Sara Slane 

Yeah, man, I think then I'm sure the operators can opine on this more than I can. But the difficulties as a consumer then to actually be able to log in all the verification processes that you have to go through anti money laundering, making sure that you're saying who you are is who you actually are. It's unfortunate because this was a reoccurring theme throughout the casino industry. It was like the bad guys were always punished for playing by the rules and being under a highly regulated environment versus the illegal market. It just didn't seem like The federal government really care to go after them. So that's a huge challenge when it comes to consumer ease and having great user interface. And we've seen multiple challenges. I logged into a couple sites when I was in Pennsylvania and the difficulty that some of the operators have had to provide a seamless customer experience. So that is critical to making sure that we can actually get to a big handle number like that.

 
Jeff Ma 

You guys matter?

 
Mike Primeaux 

Yeah. I think from there's a lot of ways that we increase handle I think 500 millions ambitious, I put my number 175 You know, I think you kind of on a macro level, you look at spin per adult, you know, you compare what's the UK what was Australia where these major markets, and then you back it down to how many states you're going to legalize and understand, you know, you got a discount due to the fact that we just we don't have, you know, a sports book on every corner like you do in London, etc. to where you're going, how do we get the People betting offshore to come on shore. I think payment options are going to be critical. From now until 2030. You know, it's only becoming easier to get money onto onshore books, it's only going to be harder to get money on to offshore books. So that's one going to be the main driver, I think inherently people also are engaged with their local legal book that has local legal promotions, you know, you walk into, you're going to pa you see Eagle stuff everywhere, right? You You go to an offshore book, you know, you don't have the same level of customization you don't see you're not getting promoted the same things. So there's a lot of ways to get the the offshore customer that's, you know, they're not they're not the professional better there. They're still recreational customer. They just have done it offshore. And I think, as Matt alluded to earlier, you know, nine out of the 10 people that you were seeing had some form of bad offshore Now they're coming on. Sure. Yeah.

 
Jeff Ma 

So we talked to now we're talking about the gray market. What are the other ways that you can grow the handle? Right? Like that's, that's certainly one way is to convert people. What are some other ways that you guys are thinking about this? I mean, Matt, you guys are a perfect example. Because you came in from the DFS world, you had a database already have customers? Is there a world where we don't have to worry about the illegal market? Or like in other words, we can just start converting regular fans into

 
Matt King 

from our perspective, it's all product first, right? Which is if you create the best product out there, and

 
Jeff Ma 

when I say how do you find product I guess it's like you guys all have you guys talked about product and rd, but I didn't hear anyone define it in a way that made me go like, Oh, yeah, that's a great product, I get it. So like I would challenge like, what do you mean by product?

 
Matt King 

So I break it down into three components. One is the actual kind of betting experience itself and that can be everything from You know, the number of markets, the pricing of those markets, the promotions that wrap around it. The second piece is the user interface, and basically creating a user experience that's on par. And as good as other kind of marquee apps out there. And then the third piece is the kind of customer experience that you wrap around it in the form of customer service and everything else. Because we are dealing with people's real money. We're dealing with people's private information. And they're going to be questions about that. And so a big part of what we've seen differentiate our product relative to those in the market is not so much just the tech itself, but also the customer and the human interaction that occurs in either the retail sports book or with our customer service team, in terms of educating people on why we need the data and why it's important and why it helps them. So those would be the three big aspects. But to your question about how do you grow handle is, a big chunk of it is always be innovating. And so if you look at what DFS did, DFS massively increase the size of the fantasy business because we created new game mechanics that were more millennial focused and more mobile first. And we think that the opportunity exists in sports betting as well to continue to create new types of bets, and new bedding experiences that will drive people to play more.

 
Jeff Ma 

Yeah, I mean, so I think that's great. And I think the DFS analogy is great. So I would what I would wonder is and Scott, you can jump weigh in on this in a second. But the the challenge that I have when I see sports, sports with operators talking about product is when I when a sports bet, figuring that out is akin to checking an online banking statement right now. It's not an exciting experience, right? And so, how do we how do we start to push, you know, product innovation? And I wonder because I think one of the things that you know, Sarah, when you and I were talking about like the challenges right now or that With all these states that are rolling out, you guys are just going after all these different states, you're having rule things out. So you're not having the time to put innovation into user experience that you might need to. And and I think that's a it's a difficult challenge that that's face right now.

 
Scott Butera 

I mean, one of the one of the things I think about is, you know, when you want to grow the market, you have to grow your number of customers, you have to get more out of your existing customers. And I completely agree that product and technology will drive that but I think more so. It's about the form of energy sports is a form of entertainment itself. So I think if, you know, we had much more festive experiences around sport that would drive sports betting and introduce, you know, more casual fans, to sports betting, as part of an overall entertainment experience. That's more festive. I think that would go a long way, not only for sports bettors but for franchises. And I think if you compare some of the big sports franchises out there, compared to other entertainment franchises like Star Wars, you know, there's They don't have the same kind of value because they haven't, you know, appeal to as broad a group as they could. If it were more, you know, entertaining, and I think, you know, you're seeing that start already, you know, years ago used to be sports, where the entertainment in and of themselves now it's much that it's almost like a night out that includes sport as part of a food and beverage or social, experiential type situation. And then if you create some kind of competition in sports betting, where it's more than just checking your bank statement, it's sort of like seeing where you rank compared to your peers or, you know, sit in stadium experience, and you have people competing against each other competing and other arenas, things like that. You can create something that's much more interesting than just simple sports. But

 
Sara Slane 

I want to when we started off and just saying the biggest surprise I think one of the other things I've noticed is just how incredibly complicated This is and how many different moving pieces and parts are going to have to come together and work together. And it is a bit of a speeding car down the highway trying to build it at the same time. I mean, the operators are being pulled in a million different directions trying to get market access, trying to get their product up, trying to make private payment processing better smoother, trying to do deals with the league's and the media companies. And so there's a lot of things that are going on. And I think to your point about, you know, how do you grow the market? Or how do you there's, there's going to be a whole player acclimation period that's going to have to occur and I say this as someone that does not sports, but and has, you know, really tried to understand and learn, and quite frankly has never really been targeted, you know, to to place a bet. So women namely are I think a whole market that, you know, has potential as is I think those people that maybe weren't betting or have never met in the past but would be interested in doing so. And it's how do you educate them around the product to get them interested in nothing to place about?

 
Jeff Ma 

What role do you guys think? I mean, when I think about growing the handle, obviously having, you know, professional gamblers who are high volume and putting lots of money through a system and having it the markets evolve more to being like financial markets versus, you know, recreational markets. Do you think there is an opportunity for that for things like exchanges? Or do you think that's just sort of pie in the sky kind of stuff?

 
Matt King 

I mean, I can take that one since we operate globally the Betfair exchange, which is the largest betting exchange in the world. I think, from the user perspective, the A lot of what the exchange is about is about price and it's tended to be a lower price model. I think the challenge with the exchange model is what Sarah mentioned, which is the wire x

 
Jeff Ma 

or look from from a price standpoint, what what Matt's alluding to is the actual price to a customer to a better the actual like having a better price meaning you're giving up less vague or less percentage A sports book right?

 
Matt King 

Thank you for no problem. The I think the biggest challenge of the exchange model in the US is going to be the wire Act, which is the way the wire act works today, you would basically have to have each state serve as its own exchange, and you couldn't share liquidity across state lines. And so we think that the wire act is going to be the biggest impediment to really building an exchange type product here in the US.

 
Jeff Ma 

So if you guys, do you think that that would be if that were feasible? Do you think that that would be something that you guys would go after?

 
Matt King 

From our perspective, it's it is definitely a product we think there's demand for we would absolutely explore it and you know, the way we look at it is the other big thing to solve is it's a very sophisticated product. You're talking about backing a better laying a bed and it to Sarah's point about acclamation is there just aren't that many people my illegal market comment aside that are sophisticated enough they would feel comfortable in an exchange today, basically I research right and so part of it is actually about your rethinking and creating a simpler version of the exchange to make sure that people feel comfortable operating in that environment, if that's what they want to do. I actually think,

 
Scott Butera 

you know, anything that provides liquidity usually has some kind of benefit to a consumer. And I think we live in a world where, you know, the in in game in line betting, which is when you're betting as a contest is taking place, is future, you know, sports betting is, and I think an exchange really facilitates that. So if I make a bet on a team and in a football game, and they get a couple of lucky, quick touchdowns, I may want to cash in on that, as opposed to see what happens for the rest of the game. Conversely, if I'm down, I may want to punch out and get involved in something else. So I think having liquidity and the ability to transact more and take advantage of situations in real time would be beneficial.

 
Jeff Ma 

I mean, I think it's obviously beneficial to the to the fan, but is it beneficial to you guys as operators because clearly, you know, Like you mentioned in play wagering, right one, there's many, there's many layers to white and play wagering is not as big as it should be in the us right now. Some are technical, but some are also risk management. Right? You guys are not comfortable taking, you know, in play wagers you, you know, it put delays in specifically for risk management, and create somewhat of an unfair game for the sports fan. So, I guess, I guess the question is, like, if you really think about growing handle, isn't it kind of about trying to create, you know, allow all sorts of betters not just recreational betters and worry less about margin and more about volume and ultimately, that will grow handle over time? I mean, I would I would challenge

 
Mike Primeaux 

Why are we Why are we trying to grow handelman you know, what, like, handle doesn't mean anything. Margin revenue, that's what matters right? So I can I can use that matters to you. Right, the higher margin is really bad for the fans. Well, I'm just saying I could increase handled by giving away 100% offsets right. For every dollar you bet I give you $1 I'm gonna have a lot of handle. Right, but that doesn't mean anything to me as an operator. So our goal as operators is not to increase handle, it's not, you know, you can't look sportsbook, desportes look and say, Oh, these guys have a handle these are be handle and just subtract them and know that, okay, they're operating the same. So it's, I get what you're saying. And I understand that, you know, the professional, better is feeling the the US model as retail books are coming in. We have lower limits, we have trading risk management, we're not trying to get picked off on bad lines. I understand the debate. I just don't think the answer is to say, okay, allow people to bet more on on markets just to increase handle.

 
Matt King 

But I think Jeff, to your point and we talked about solving for is actually active players, right? It's not actually handle or revenue. What we want people is more people playing more often. And frankly, even though they're playing last each time, that's okay because to what you're getting at How do you make sure you're delivering something that consumers love. And the way we've always looked at it is the best way to prove that is that it's something that more people want to play, and they want to play more often. And frankly, you'll figure out the monetization as you go. So that's how we run is we want just more players,

 
Scott Butera 

Actually. Slightly different notion. I mean, I believe that and maybe it's a function of living here in Las Vegas and always seeing that the best properties seem to do the best and good times and bad is that you should invest if you have a long term view, you invest in your customer base, and that may hurt your short term margins that may hurt your short short term revenues. But at the end of the day, in 2014, you'll be better off for having invested in that customer base and having that customer base stick with you and decreasing your acquisition or acquisition costs, in creating that extraordinary experience, whether it's through great betting opportunities, or through other things that you get as a benefit for being a sports better I think that pays off.

 
Jeff Ma 

that matter. I like that what you were talking about in terms of sort of customer metrics. So how do you balance? Or how do you how do you balance like customer health versus margin? Right? Because like, if you you know, I, I've sat in meetings with sports with operators, not none of none of which are on this on the stage right now, where they've bragged about the the handle or the whole percentage that they have. And as they say this, I just think like, that's, that's terrible, right. And so, but but I understand you need to make money, right. So, like, there is a world where there is a reasonable margin business with high customer satisfaction. So how do you think about that from a metric standpoint?

 
Matt King 

We think like a movie ticket, right, which is, if you think about a movie ticket, you know, used to be eight bucks now it's 15 bucks, but, you know, fundamentally $15 gets me two and a half hours of good entertainment depending on the movie, but So we look at it from the perspective of the time that and the amount of entertainment that somebody gets in return for, you know, giving, you know, if they wager $200, on average us getting $5 out of that, that's the way we look at it because and in our business, because people are betting multiple times, which you have to look at is really just around kind of what's their aggregate, what's the average win rate over a period of time, and it is that person coming in and winning some losing some, but generally getting a good experience out of their hundred dollars, or they coming in putting one $100 bet down losing it all and then saying, Wow, that was a really bad experience. And so we look at it through that kind of your time value of entertainment perspective, because the reality is, we're competing for a share of the entertainment wallet, and it's not just about betting, it's about everything else that could be doing and we want to make sure that we're good value for the money.

 
Sara Slane 

I just had At one point in this whole thing, which is I think that this is what the opportunity is right? Like when you sit here and you think about innovation in the industry and sports betting was largely restricted to Nevada, in the US, not a ton. I mean, it was 2% of all the gross gaming revenue in the state of Nevada. So that gives you a flavor for how small a piece of the total gaming revenue, the operators just not focused on it. They didn't invest in it. They didn't do a lot of research in it. It was only a couple years ago that you actually had interstate mobile happening on sports, and now the floodgates have open and so I think this is a great point where we're in an audience right now that is outside of gaming, that is far more technologically focused where innovation can happen because margin is typically been around 5% hold in Nevada, if you looked at in the in the US, this is a great opportunity, then are there ways then to strike the right balance and driving more customers interaction and wanting to be involved, but then also on the flip side of it that the operators are benefiting.

 
Jeff Ma 

Yeah, I think that's a good a good way of looking at it. And, Matt, I like that, you know, the movie ticket analogy or just the general analogy of entertainment value. It's like the whole thing like, you come to Vegas and you lose, you know, $1,000 in your first five minutes playing blackjack, it sucks. If you lose $2,000 over the course of a weekend, you go to shows and you have some nice dinners and go to clubs. It's the best experience ever. I want to come back. Okay, so let's talk a little bit about let's switch to states. We talked a little bit about sort of regulatory taxes. We've talked about competing with the black market, the gray market. But as these states roll out, there is a wide variety in what they are doing from a taxing standpoint, from, you know, sort of like a regulatory standpoint for mobile. What states do you guys think right now are the models that the other states should be looking at for success for successful innovation, that space

 
Sara Slane 

Be curious to hear if anyone said other than New Jersey

 
Jeff Ma 

that they all did. They all said people said Michigan people said Colorado. People said Pennsylvania No, actually no one's in Pittsburgh. Pennsylvania has a very high tax rate. So it's Yeah,

 
Matt King 

Indiana's doing a nice job right there. They've gone quickly on sorry, Indiana, Russia, they've moved quickly on provisional licensing. It's a competitive mobile market. It has I think a lot of the same things as New Jersey does. But I mean Indiana was the other one that we noted is doing a nice job.

 
Jeff Ma 

So New Jersey was an interesting one because while people thought it was a great you know, what they rolled out was great there they gave out so many skins that it becomes a very competitive market right and as operators I think that that's a challenge for you guys to look at that as a good thing when there's that many skins but I mean, I guess the question becomes, is competition good for this industry? Or is it bad and what is like, do you think all for like all three of you guys Will you guys all have successful sports book businesses in 10 years?

 
Mike Primeaux 

I would hope we would all say yes, I think I think competition is good for the market. Obviously, it's tough on us in the short term. It's great on, it's great for customers. I mean, you can go to New Jersey 17 books and get 17 new signup offers and daily promotions everywhere you go. Obviously, it's, it's competitive, it's costly for us to acquire customers, especially in New Jersey. You know, it's it's much more expensive in New Jersey than PA, Indiana etc. I put Colorado as someone or a state that I'm excited about their regulatory environment, low tax rate, there's going to be enough operators mobile, but our interaction with them they've been very pragmatic from a product and tech side. You know, we we have a lot of challenges that we have to deal with day in, day out just to release it's not like the wild Or startup where you can do five pushes a week and have new code out there. Or if there's an issue, you can turn it around and get it solved. You know, it has to go through lab, it has to be checked off by regulators. So the time to market for everything that you want to do and innovate on takes forever, in Colorados from our interaction so far, they're not live yet, but but we think it's going to be, you know, they're taking a pragmatic approach to understanding these challenges for us and trying to step back and say, you know, we want you to be able to innovate, we want you to be able to be quicker to market. They don't want to throw up kind of the red tape. But I think I mean,

 
Matt King 

Mike raises a good point, which is the, the interaction with the regulators is actually going to be what proves a state to be a good state or bad state over a long period of time. And because if you put yourself in the shoes of a regulator other than New Jersey, this is the first online product that any regulator is regulating. And so you have regulators that are just trying to do the right thing which is protect customers first and foremost. And so the My view would be, which states are the best are going to be? We don't know yet. Because it's going to be the ones that to Mike's point, work most collaboratively with the operators to allow innovation to happen. And I think it's just too early to

 
Jeff Ma 

tell what the best way to do that is like that. It's interesting, right? Because like, we kind of had this whole thing with the gray market and like, how do we allow? How do we start converting people? And how do we foster innovation? In a regulatory in a highly regulated environment? What are some suggestions you would give to regulators to help?

 
Matt King 

Like one I would think about, that's very relevant for this audience is in most casino environments, and Scott can speak to this better than I, every vendor had to be licensed, and so front, and you kind of get it because a vendor is walking through the cash cages and everything else. And we've seen regulators that apply that mindset to an online environment. And so I have to go to every single one of my martech vendors and say it If you want to stay in our stack, you need to get licensed in the state. that's hugely problematic for somebody who realistically gaming is a small part of their, their business. But it has a very big impact on my ability to bring the best technology to bear for customers. And so thinking about things like vendor licensing in an online world, new indistinct, as opposed to simply an extension of what they've done in the brick and mortar world, I think would be one example. Yeah,

 
Scott Butera 

so much of his just his master's education. So the best regulars are the ones that take the time to understand the business, understand how technology works, understand the benefits of technology, and how it can actually increase security and in checks and balances and things that a regulator wants. And because this is a new business for most legislators and regulators, we spend a lot of our time just trying to educate them on that. So if they can get up to speed and understand what we're doing that that'll be the best environment, terms of competition, just to take a step back there. I think that competition is good for the market, but having healthy operators is also good. So you need to find that inflection point, I was one of the people that mentioned Michigan because Michigan has a lot of the benefits as Indiana, of New Jersey, but with with less comp, less less skins available so that you could have, you know, it operators who can come in and invest in product, invest in people and give people comfort that they're going to be around a while. So one of the problems of having unlimited competition from a customer standpoint is you may become a loyal customer company that goes out of business. And that's not a good experience, or you may have trouble getting your money back. So I do think there's an inflection point between competition and having healthy, you know, stable operating environment.

 
Jeff Ma 

So if we go and now switch to the final sort of section of this, which is around innovation and competition, we've talked about product and r&d being like sort of the thing that wins, but I'd love to like get more specifically more specific into that and I want you to has to kind of go into your crystal ball and look 10 years out what it what does that experience look like? what it what is new life? Let's not talk about like buzzwords, let's actually talking about specific things that you think, you know, may evolve that will change sports betting and will will will make, you know people winners and losers in this, you know, operators winners or losers like what are those types of things now, Matt, you weighed in with, you know, customer service and the whole experience around like how you treat your customer. That makes sense. But, I mean, we're talking about again, like this idea that I as I'm not a millennium middle millennial, I'm way too old for that. But like, the millennial that wants to go in, makes a bet and then waits four and a half, five hours for that to be settled. That's not the experience millennials want. So what is what is the real innovation that's going to happen in this space? Like if you could, you know,

 
Matt King 

well, I would reset a little bit because that's not the experience that at least we're giving millennials today. Right? I have cash out available. I have Play average football game I have over 100 and play markets running,

 
Jeff Ma 

how many? How many percentages of my employ bats will get rejected?

 
Matt King 

Very few.

 
Jeff Ma 

Okay. I'll go use your product. I'll go,

 
Matt King 

you're more than welcome guessing I can give you a promo code.

 
Jeff Ma 

There we go. Will you let me actually bet, I will let you back. We're

 
Matt King 

open to one at all. So look, I think that's not to say there's not a lot more we can do. Like, I think one of the things that, you know, we're spending a lot of time with is personalization. So if you think about in for the average NFL game, we have 250 different markets, so 250 different things somebody could bet on. That's a lot. And it's very overwhelming to the casual fan, but it it's the level of flexibility that people want. And so one of the things we have to figure out is how do I build a user interface that makes that breath of choice that limitless betting digestible to the average fan and Overtime learns what they want to bet on, and then serves them that content in a much easier way. So, personalization will be one area where I'd say, you know, we have to catch up to what a lot of the other tech companies are doing. Because as we add more capabilities, it's going to become more overwhelming for people if we're not careful.

 
Sara Slane 

And I would, I would say, I was gonna, I think it's a really good point. And just the subtlety of how this is all handled. I mean, if you look around the world and what happened in the UK, and this sort of in your face direct advertising for sports betting, and I think those days have kind of come and gone. I think the operators are pushing back on some of the media companies and the league's about, you know, how much money they're going to spend and what they want them to do as far as ad ad placement, everything else. And I think that it is much more of a customization process. And again, I get back to that sort of acclimation period. You've got a lot of grand dreams right now and hopefully they come true with in play prop betting on baseball and hockey and basketball. But there is a lot of work that's got to happen between now and then for that to be 16 Aspel I mean, I think the ultimate dream, right is to have an in play products, people are sitting at home, watching the game being a little bit on every single play. But again, I get back to it's all got to work together. And again, from a consumer standpoint, this is such new territory for me like, what does this mean? How does it work? So again, I think there's just a lot of work that's got to be done on the front end for that to actually come to fruition.

 
Mike Primeaux 

Yeah, I think from a product side and the competition side, I think 10 years from now, as you're trying to get to, it's going to be a totally different industry, we're going to be across the states, but competing in specific separate markets in every state. So you can have different competitors, every market, you're going to have different dynamics, every market, you're going to have a move towards being local in every market. I think that's going to bleed through the product. I think you're going to see customization but you're also going to see the people the millennial like really the Gen Z and 10 years that you're trying to get They're not the person that came up betting on an illegal sports book, or they're not someone that as we were talking about in today's, you know, environment, they're already kind of familiar with products like this, I think education is going to continue to be bigger and bigger and bigger as you become more and more recreational. In today's word, recreational just means not professional, but it doesn't mean sports fan. There's a lot of sports fans out there that don't know, you know, when you said the word vague, like no one's going to know what that means, you know, so there's still a long way to go. Obviously, operators are going to take, you know, their unique selling point and maximize that to their fullest extent. So Fox bat, tied to Fox Sports, you know, we're very focused on media and content, I think you're going to see, you know, not just the putting betting on TV, but you're going to see us taking what's being done on TV and bringing it to your phone as well, alongside Ben. So I think You know, everyone's going to find their different, you know, shake out in the, in the marketplace. I think, as you know, you were half joking that you you can't get a bet down. And I think you're going to see some operators maybe focus more on the high VIP type better and your experience is going to be completely different than my customers experience because you want something different than

 
Jeff Ma 

Yeah. And and I'm not, you know, I'm not. I mean, I'm not picking on Matt, because Matt's companies is definitely one of the pioneers in terms of doing, you know, but to Sarah's point, which I think is really interesting. If you think about this whole industry for so long, the customer experience had been largely ignored right. And my point on in play, wagering was not necessarily like that I get a bit rejected, but just generally, the experience of in play wagering because of the built in delays and unintentional rejection sometimes creates an experience where you know, a high percentage of the bets that you put in or don't go through, so Imagine creating a product where you knew that like 50% of the time it was going to get rejected. That's not a great customer experience. So I think it'll be interesting over the, you know, when you talk about the future of sports betting, it'll be interesting to see how much operators evolve. You know, as you know, I love hearing what you're saying, Matt, it's it's, it's, it's tough. And what you're saying to Scott around the whole experience of it. We have a couple minutes left. And so it would be great to talk a little bit about you know, the the sort of what, what I think Mike was alluding to, which is the media implications, what what implications Do you think legalized sports betting will have on future media, you know, sports rights, the way that like sports is even presented broadcasts, etc. What are some interesting things there? Do you guys have any thoughts?

 
Mike Primeaux 

Yeah, I mean, I've, I've just spent a year talking to media companies about sports betting there, they're all extremely You know, they're all very knowledgeable about it. They understand this is going to transform their business over the next decade, you know, Fox has obviously jumped in quickly, I think multiple ones will follow, I think you're going to see from both the free to play and the betting side, just like fantasy created more, you know, media engagement, with people watching out of market games, so will sports betting sodas free to play, we see something like 50% of people that enter a free to play game end up watching the game to see how they did. So all of that it's, it's just going to create more and more, you know, demand for the NFL, the league's etc, to create better data to populate that data to us quicker so that we can provide a better service. It's kind of that ecosystem that goes back and forth between us.

 
Scott Butera 

I think in sports, it kind of changes the landscape for the media providers. You know, basically up until now, sports media is all about, you know, bidding, you know, enormous amounts on rights for teams and leagues to broadcast Games. Now, I think this opens the door, obviously, for a lot more original content around sports betting. But I think even more so sort of gamification of maybe smaller leagues. So if you have a league that perhaps you can maybe control or own the content of and create a sports betting experience around that, that creates a content opportunity that you can own and and not have to pay a big rights fee for so I think it opens the door for more variety of Sport and Sport viewing and more opportunity for original content around that.

 
Matt King 

Yeah, I think the two things I would highlight one to your earlier point Jeff on in play betting, it will put pressure on lower latency video, right, because part of the reason you have a bet delay is you know, if you're watching one broadcast, there might be an eight second delay and if there's a different broadcast, it might be a 10 second delay. So I think you'll have more pressure on the latency of video. I think the other thing is, I think it will accelerate cord cutting in sports, because the reality is you people within play betting will get used to Kind of just watching small parts of a match. And so think about it as NBA league pass as a product where you can for a fraction of the cost of the game, watch the last few minutes of the game, things like that become more relevant. And because as an operator, I actually know what game somebody cares about, or what player somebody cares about. There's a much more direct connection than has ever existed before. And so I think you'll it will not cause the cord cutting but it will certainly contribute to it. And the acceleration of the trend that's already happening in sports.

 
Jeff Ma 

All right, well, that's all the time we have. Thank you guys for joining us, and thanks to our panelists, for tolerating

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