Amy Howe knows how to grab headlines.
Soon after she became CEO of fantasy sports and betting giant FanDuel Group, Howe made a splash by pointing out that the she was concerned about how the industry spends money to scoop up customers.
“If you look at the way we’ve been deploying our dollars in our customer acquisition costs relative to the value of the customer, we obsess about that,” Howe said, in an interview with CNBC after New York state launched mobile sports betting in January. “We want to make sure that we’re reaching the broadest and the right audience, but we’re doing that in a fiscally responsible way.”
Jette Nygaard-Andersen, CEO of the global gaming company Entain, is also outspoken about what she sees as unsustainable spending on advertising, marketing and promotions in the U.S. online gambling industry.
Nygaard-Andersen and Howe, women who snagged their gaming CEO jobs last year, are shaking up the evolving sportsbook and online gambling industry, which has been traditionally been dominated by men. Both see the importance of their roles in the bigger picture, from business and cultural perspectives.
“I don’t think about myself as a female CEO,” Nygaard-Andersen said, before shrugging and adding: “I show up because I’m a leader in the industry. I have ambitions to change the industry, both what we’re doing on the product side, but certainly also how we think about the industry from a diversity and inclusion perspective.”
She and Howe are also compelling the industry to think about how it spends money. The CEOs’ concerns about costs carry weight, and they elevated a nagging concern for investors: How much is too much to spend to acquire gaming customers?
Sports betting companies often offer generous promotions to customers, such as sign-up bonuses or risk-free first bets to try to secure customer business. But those promotions eat into profits. In some states, such as New York, companies pay taxes on those promotions as gaming revenue, rather than being able to deduct them as marketing expenses.
FanDuel’s biggest U.S. competitor, DraftKings, which is led by founder and CEO Jason Robins, is under pressure to plot its path to profitability. Analysts press Robins in earnings calls to explain customer acquisition costs and marketing budgets. Caesars CEO Tom Reeg launched the Caesars Sportsbook app in August 2021, with an attention-getting billion-dollar marketing budget. But then he immediately detailed plans for a return on that investment by 2023, a common target for profitability among sports gambling platforms in the U.S.
Nygaard-Andersen has pushed for different ways to pick up customers. She points to a strategy that capitalizes on the allure of the recreational aspects of gaming entertainment, including free-to-play games. In a recent interview with CNBC, Nygaard-Andersen said it’s paying off: Entain grew its global customer database by 25% last year, in addition to double-digit gains in 2020.
“That really puts us aligned with other companies that are high growth customer focused disruptors, like the Netflix and the Google, ” she said. “And just like them, we use our technology to constantly think about how can we could say, evolve our offering, how can we innovate on behalf of the customers.”
BetMGM, which is co-owned by Entain and MGM Resorts, has taken first place in market share for internet gaming and casino games and is competing for second place in sports betting in the states where it operates, according to MGM Resorts.
New opportunities
Entain just announced it will invest GBP100 million in an innovation lab dubbed Ennovate to encourage cutting-edge technology from all corners of the globe and partnering with nonprofits to apply those innovations for environmental or societal benefits.
Given the focus on the use of technology to entertain and even inspire customers, Nygaard-Andersen said it’s especially important that the tech itself is free from biases in the programming data sets and the artificial intelligence that powers the platforms. “It’s about the underserved groups. It’s certainly about women, and it’s about young girls.”
Nygaard-Andersen’s became excited when she talked about Entain’s investment in Girls Who Code, an organization dedicated to closing the gender gap in technology. “If we can get more girls excited about technology, then you start from an early age. And the minute that girls know that, they can be superstars,” she said.
Howe shares Nygaard-Andersen’s passion for expanding opportunities. She said she is enthusiastic about FanDuel’s parent company, Flutter, publicly setting an aggressive goal to have 40% of leadership roles in the company filled by women by 2026.
“Fifty percent of sports fans are women, right? But only 15, maybe 20% of the sports betting population,” Howe said. She said it is a priority to support female athletes, promote women’s sports and “target female customers in a really authentic way.”
Howe also makes it a daily practice to encourage, mentor and network with other women. At the recent MIT Sloan Sports Analytics Conference, numerous women credited Howe with hiring them, or promoting them, or connecting them to high level jobs in sports. “I mean, she’s not my boss, like, I don’t report to her,” one FanDuel employee told CNBC. “But she’s THE BOSS and to me, she’s like a god.”
Howe said she is committed to a strategy of inclusion that she believes will help strengthen the company for years to come.
“I know that I’m in a position where I can give back, and it’s something that it drives me to be a better leader,” she said. “And I truly believe it’s going to make our our company, our industry, successful over time.”
