Lessons from the Launch of Online Sports Betting in NY

At 9:01 AM on Saturday, January 8, 2022, a professional football fan in New York dropped $15 on a longshot six-team parlay that would pay out more than $1,400 if they won. This was the first legal online, in-state sports wager through DraftKings in New York history, placed a mere minute after four casino operators — also including Caesars Sportsbook, FanDuel and Rush Street Interactive — opened for web- and app-based business in the Empire State. For this customer, seemingly, the process was seamless enough; for others, however, the New York Post may have been a bit preemptive in declaring “it’s bettor in the Big Apple.”

While there’s no doubt that betting from bed will save a lot of New Yorkers a lot of time and money traveling back and forth between home and the casino, the launch of online gambling in New York exposed some digital marketing and CX breakdowns that could inform the five casino operators still “work[ing] towards satisfying statutory and regulatory requirements.” In fact, there are lessons here for any company striving to truly embrace — and capitalize on — customer centricity.

Online Sports Betting: Big for New York

In-person sports betting has been legal in New York for years, but for many New Yorkers the nearest brick-and-mortar location is two hours away, at Resorts World Catskills in ‘the middle of nowhere.’ As a result, without mobile and online sports betting, many New Yorkers have crossed the border for New Jersey, contributing 20% of the Garden State’s total sports betting action. 

Within three years, the State of New York expects its tax revenue from online sports betting to exceed $500 million; while 32 states have legalized sports betting in the US, only about one third allow mobile wagering.

Online Sports Betting in New York: Risk and Opportunity for Casino Operators

For DraftKings, Caesars Sportsbook, FanDuel, Rush Street Interactive and the other, conditionally licensed online/mobile betting companies, the opportunity to conduct business in a state with a population of 20 million is too great to pass up. Indeed, mobile sports wagering is expected to produce more revenue for New York than legal marijuana, with the state sharing profits with the private operators. 

However, an investment like this doesn’t come without risk. For one, though the median online sports betting tax rate in the US is approximately 11%, sportsbooks in New York are now being taxed on 51% of gross gambling revenue: the most of any state. In addition, a launch of this magnitude serves as a high-profile test of the effectiveness of each company’s digital marketing and CX strategies and tactics. This played out in real time on the first weekend of online sports wagering in New York.

The First 12 Hours of Online Sports Betting in New York

New York sports betting generated 5.8-million geolocation pings in the first 12 hours post launch on Saturday, January 8, more than doubling the 2.3-million pings from second-place Pennsylvania. By the end of the weekend, New York had exceeded 17-million pings, with volume from New York City alone surpassing that of every other state. 

This, of course, is great news for New York — and the casino operators:

• On January 9, ESPN Chalk’s David Payne Purdim reported nearly a million dollars in bets in one day on BetRivers (Rush Street Interactive) alone
• On January 10, CNBC’s Squawk Box took to Twitter to share an interview with an excited Caesars CEO, Thomas Reeg, reporting nearly a million individual bets placed in two days

Unfortunately, two days earlier, Caesars experienced multiple outages and apologized on Twitter for hours of downtime.

“When you have massive demand like we did, you see the pinch points in your system,” Reeg said. “Unfortunately we did not have flawless performance this weekend, and as a sports bettor myself I know how frustrating that can be.”

What’s worse is that FanDuel and DraftKings experienced similar issues. And customers noticed.

Missing Transparency and Empathy in Online Sports Betting Marketing and CX

US Twitter is always especially active on weekends during the NFL season, and with online sports betting available for the first time in the fourth most populous state, the weekend of January 8-9 was certainly no different. For the approved online sports betting platforms, this meant an initial surge of enthusiasm, followed by an avalanche of confusion and frustration as volume overwhelmed the apps and all customer support functions. 

Twitter users quickly pointed out technical issues with the apps (e.g., can’t log in, can’t place bet, can’t cash out), as well as the companies’ digital marketing campaigns and customer service practices. Brand trust was weakened by less-than-transparent promotions before and during the launch, as well as impersonal, extensively delayed customer service as concerns began to arise.

As one mobile sportsbook user told us:

First, a lot of people thought the signup bonuses being offered were free money, but you have to play through the entire $300 before you can withdraw any of it, and people new to gambling sites probably wouldn’t know this. Then, the app crashes during a key football game on Saturday and again on Sunday. And they’re not offering phone support, not returning emails or DMs in a timely fashion — I’ve sent multiple, with no response — and only offering generic responses to a few customers publicly on social. The chat? It has an embarrassingly long queue. I waited for 40 minutes and never cracked the top 800!

While the other online sports betting operations may have been a little better prepared for the sheer number of bets, none offered users easy access to live support; for many, too, the promotions lacked sufficient clarity.

Combined, this meant paying customers felt betrayed by a somewhat deceptive lead generation ad, and then unheard and unvalued by a customer support team not offering the necessary assistance in a timely, personal manner. 

As a result, what could have been another opportunity for sports betting companies to improve goodwill wound up demonstrating why empathy and transparency are so important in marketing and CX.

Empathy and Transparency: Learning from Our Mistakes

Today’s sophisticated consumers are tired of being advertised to, misled and ineffectively nurtured. They want more than personalization, they want personal interactions with brands — across all channels, through the entire customer lifecycle. In fact, Google has found that 98% of Americans switch between platforms and devices in the same day, and 90% of all consumers expect consistency in their interactions no matter where they are. That means building trust through thoughtful personalization, empathy and transparency across your website and/or physical location, social media accounts, emails, text messages, digital ads and customer service communications. In other words, smart data is key to audience segmentation and targeting, but to be customer centric you must fully embrace the person behind the consumer behavior; to understand your customers, their pain points, and what motivates them to act, you need to see through their eyes. 

Take the sports betting aficionado in New York City. Let’s call her Jane. Jane visits the casinos in Yonkers and Upstate New York, as well as in nearby Atlantic City, NJ. In the last year, she has searched and read articles about the forthcoming launch of online/mobile sports betting in her home state. More recently, she has clicked on retargeting ads offering “$300 in free bets” and, despite experience in sports wagering, believes the $300 will be hers as soon as she signs up. Excitedly, Jane downloads the sports betting app to her iPhone on the first day of legal online/mobile betting in New York. First, she has trouble logging in, and then creating her account. Then, she discovers she has to play through the $300 bonus before she can withdraw any of her winnings. Finally, the app times out as she attempts to place her first bet. Jane then goes online and discovers the web-based version is down as well. So she searches for a customer service phone number, and can’t find one. She finds an email address, and emails the company. Then, realizing the wait for an email reply could be hours or days, Jane opens the chat bot. There are more than 1,000 people in the queue, so Jane — frustrated and feeling unappreciated — gives up, and never places a bet. She decides she’ll try out competitors’ sports betting apps and websites and, if they don’t suffice, return to the brick-and-mortar casinos. “A long drive,” she says, “sure beats a whole day wasted on the phone.” 

For the State of New York, and the casino operators who’ve invested significantly in the launch, Jane represents not only lost online/mobile income but a lost evangelist — a customer converted from vocal proponent to cautious user, at best. Unfortunately, for many consumers, trust can never be fully regained. For the company who lost the customer, this means revenue loss — and revenue gains for their competitors.

So what did the casino operators do wrong with their online/mobile launch in New York? Well, a lot. And it started with a focus on maximizing profits, quickly, over understanding who would be using their product and why, and what types of support they would need, particularly in the face of overwhelming volume during the first weekend.

Then what could they have done?

1. They could have listened and adapted to their customers. 

With a customer data platform, for instance, they could have unified, profiled, segmented and tested and optimized communications with each customer.

2. They could have risked the loss of some immediate enrollments, and guaranteed better long-term results, by clearly explaining their promotions. 

Almost all (94%!) consumers say they are more likely to be loyal to a brand that is transparent.

3. They could have prioritized the customer experience by ensuring their apps and websites could handle the predicted volume, providing a phone number for consumers who prefer speaking to a human being, and training and employing more customer support personnel to manage chat and reply to emails. 

Nine in 10 Americans use customer service as a factor in deciding whether to do business with a company, and 80% of all consumers would rather buy from a competitor after a single bad experience.

Image Credits (in order of appearance)

1. Photo by jaikishan patel on Unsplash: https://unsplash.com/photos/hYcLdV52Aa4
2. Photo by camilo jimenez on Unsplash: https://unsplash.com/photos/DOUoG3sRQQY
3. Photo by mostafa mahmoudi on Unsplash: https://unsplash.com/photos/Qy_F1Wqw6Ho
4. Photo by Jon Tyson on Unsplash: https://unsplash.com/photos/vVSleEYPSGY
5. Photo by Nik on Unsplash: https://unsplash.com/photos/z1d-LP8sjuI