Topgolf & BetMGM: A New Sports Betting Partnership
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Topgolf & BetMGM: A New Sports Betting Partnership
BetMGM has announced partnerships with Topgolf and Buffalo Wild Wings, but what does it mean for the future of sportsbook marketing?
Friends,
Topgolf, the destination-style venue where customers play technology-enabled golf games accompanied by music, food, and drinks, announced a sports betting partnership with BetMGM last week.
Financial details haven’t been disclosed, but the agreement is for multiple years and will allow BetMGM to expand its physical footprint in major cities like Las Vegas, Nashville, Detroit, and Denver.
Remember, given that legalized gambling is a fragmented, state-by-state process here in the United States, this list will expand as regulation allows.
As for the market’s reaction, it was positive.
Remember, when TopGolf was acquired by Callaway last October through a $2 billion all-stock transaction, the stock fell ~20% in a day.
Now, less than 5 months later, the stock has rebounded — up ~80% from its low in December and much closer to its 52-week high than its 52-week low.
That’s obviously positive.
From a sports betting partnership perspective, the deal certainly makes sense.
As sports betting is legalized in more states throughout the US, every sportsbook from Fanudel and DraftKings to Penn National and BetMGM are competing for market share. Most of these deals revolve around partnerships with media companies or individual teams and stadiums. Still, MGM’s deal with Topgolf is another creative avenue to provide long-term value — similar to their deal with Buffalo Wild Wings.
Even better?
As sports betting is legalized in more states over time, Topgolf provides MGM with a partner that has the infrastructure to scale alongside them.
Here’s what I mean…
Topgolf currently has 58 U.S. locations open, with 33 more venues under construction and a plan to open ~10 locations annually starting in 2022. From a foot-traffic perspective, Topgolf saw 23 million venue visits in 2019, and if they hit their target of opening 10 locations annually starting in 2022, they’ll see ~65 million venue visits annually by 2030.
That’s a lot more than a single sports stadium will provide.
Sure, a lot of it depends on when/if certain states legalize sports betting, but the point remains the same, Topgolf provides substantial reach and scalability for BetMGM moving forward.
In my opinion, when it comes to the overall sports betting industry in the US, we are only in the first inning. JP Morgan expects the sports betting industry to bring in $9.2 billion in revenue by 2025, up from $1.5 billion last year.
Not only is that a massive number, but it will have immense trickle-down implications for sportsbook partnerships.
With attention spans declining and social media taking over, we’ve moved into a world where audience is the new currency. Influencers are building massive audiences, short-form media companies like Overtime are excelling, and corporate marketing dollars are shifting to newer, higher engaging products than ever before.
Sportsbooks will be no different.
As the shift toward increased market access continues, we will continue to see more monetization through this space. Partnerships with personalities like Pat McAfee and Rob Perez (WorldWideWob) are obvious choices, but sportsbooks will look to get creative as inventory declines. MGM agreeing to deals with Topgolf and Buffalo Wild Wings are just two of the earliest examples.
In the end, with so many options available to consumers, the sportsbook winner of tomorrow is lowering their customer acquisition cost today through unique, engaging, and digitally-centric partnerships.
Who will end up winning?
On that front, your guess is as good as mine.
Have a great day, and we’ll talk tomorrow.
Extra Credit
Today’s extra credit is a little off-topic, but I think you’ll enjoy the “behind-the-scenes” nature of it.
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Topgolf & BetMGM: A New Sports Betting Partnership
As we see TopGolf thrive again its crazy to think that it was a potential bankruptcy candidate about a year or so ago.