On Tuesday, Yahoo and MGM Resorts announced an exclusive partnership to power sports betting for Yahoo Sports and “create collaborative content experiences and live events.”
Given the breadth of the two companies’ activities, it’s a deal that has the potential to spin off a number of additional products and opportunities down the road.
It’s just the latest in a series of collaborations between major companies in the fledgling US online gambling market. MGM’s own sportsbook, BetMGM, is developed by Roar Digital, a new company formed in partnership with online gambling giant GVC.
In a recent conference call, GVC stated that it was hoping for a 10% to 15% market share for BetMGM. At the time, that seemed like quite an ambitious goal. It now seems like a much more reasonable target, though, given how many potential customers it will reach through this deal.
Initially, the deal will see Yahoo integrating content supplied by BetMGM into its Yahoo Sports app and website in a type of affiliate deal.
Users in states where online sports betting is legal and BetMGM holds a license will see betting odds alongside the usual scores and statistics. Interested users will then be able to click or tap through to the BetMGM app or website in order to place their bets.
Already, there have been hints that there’s more to come.
Yahoo has a fantasy sports app (Yahoo Fantasy Football and More), which includes both free and real-money contests. The companies indicated that some sort of integration between BetMGM and Yahoo Fantasy would come a little further down the road.
It seems that Roar Digital is working on additional apps as well, including free-to-play and “fantasy style” content. These will be integrated into Yahoo Sports and potentially other Yahoo apps in states where sports betting is not legal or BetMGM doesn’t yet have a license.
No details are yet available about those future projects. It’s a reasonable guess, however, that something along the lines of Fox Bet’s Super 6 will be among them.
Super 6 is a free-to-play sports prediction app awarding real cash prizes. The Fox Bet version is based on a long-running and very successful product of the same name offer by Sky Betting and Gaming (SBG) the UK. SBG was acquired by TSG last year, as part of the latter’s gradual shift away from poker into other verticals.
The game offers weekly contests in which players attempt to predict the winner and margin of victory for six football matches — getting all six correct results in a six-figure jackpot. If no jackpot is awarded, a smaller prize is split between the players with the best results.
The marketing function of an app like Super 6 varies depending on the legal status of sports betting in a state.
In states with legal betting, it serves as a direct player acquisition tool. In states without, it serves as a legal way to build brand awareness. That’s important as a placeholder for possible future legalization, and because mobile apps make it easy for interested users to get money down while visiting a state that does have legal betting.
Whatever Yahoo and MGM come up with together is likely to fill the same sort of role. The specifics may differ, however.
For one thing, Yahoo is known for its fantasy sports offerings. Therefore, its free-to-play contests will likely involve some element of player drafting instead of (or in addition to) traditional score predictions.
Another difference is that there will be more prizes on offer than just cash.
While the Fox Sports-TSG partnership is almost entirely digital, MGM owns a chain of resorts, casinos and live entertainment venues. These include 14 locations in Las Vegas and eight throughout the rest of the US. Trips and event tickets are, therefore, almost certain to be among the rewards for contest winners.
Although the partnership is focused on sports, for the time being, we may also see it expand to the casino and slots verticals.
Whereas the Fox Bet platform is exclusively a sportsbook, BetMGM is a full-service online casino. Likewise, Yahoo produces a broad range of apps, although its only foray into real-money gambling so far has been its fantasy sports product.
Yahoo is also more likely than Fox Sports to be interested in trying new things. Indeed, its story for the past decade has been one of a company trying to reinvent itself.
In its very earliest incarnation in the mid-90s, Yahoo was an internet directory. It consisted of a hierarchically organized list of other websites and served as a popular starting point for early users of the world wide web.
Yahoo attempted to adapt as the internet evolved, providing a search engine, an email service, an instant message application, and so forth. Yet, at each turn, it found itself beaten by superior — or at least more popular — products from the likes of Google and Microsoft at first, and later Facebook and other social media services.
It began its quest to start over in 2012 with the first of several waves of layoffs, as well as the appointment of new CEO Marissa Mayer. In 2015, Yahoo began instructing its development teams that mobile was the way of the future — and standalone apps, in particular, rather than mobile versions of websites.
That was the same year that DraftKings and FanDuel were at the height of their marketing push, and daily fantasy sports were all the rage. Yahoo looked at its fairly successful social, season-long fantasy sports product and decided to take the plunge into real-money contests.
Unfortunately, Yahoo shut down its Yahoo Games service in 2016. This included social, play-money casino games which might have presented a further opportunity to integrate Yahoo’s products with MGM’s.
On the other hand, the company did launch a new social gaming product this year, called Yahoo Play. This is a hybrid television and trivia app, which might also serve as a template for future crossover products with MGM.
Yahoo Play users can stream various pop culture TV shows in the app, then participate in trivia contests based on the content of those shows. Based on their performance, players can earn points that can eventually be redeemed for gift cards.
A similar combined media-gaming app might be in the cards for MGM and Yahoo. What’s missing from the partnership on that front, though, is the media content. Yahoo Sports has occasionally partnered with Fox Sports to provide streamed content, but the latter’s deal with TSG takes this off the table when it comes to anything MGM-related.
That said, MGM is likely already looking for a broadcast partner anyway. With Fox Sports and ESPN spoken for, the most likely candidates would be NBC or CBS.
There’s still a lot to be figured out, then, and perhaps some pieces are missing from the puzzle. From the looks of things, though, promoting BetMGM from within the Yahoo Sports app is only the first step in the relationship.