Prime Sports entered Ohio’s its first state Sept. 13 with a different strategy from its 19 competitors there. 1o684t
Embrace sharp action. Allow high limits for all bettors and don’t penalize those who do well. Avoid spending on bonus bets and other promo offers to attract customers. Refrain from heavy advertising dollars.
In other words, Prime Sports is the anti-sports betting apps.
And after nearly three months, how’s all that working out for Prime?
“Everything we’ve done over the last three months, we’re very happy about,” said Joe Brennan Jr., executive chairman of the new operator. “The mass of liquidity coming into us is from the sharp guys, the toughest guys, and they haven’t bankrupted us, and we’re not going to be bankrupted anytime soon.”
Prime Sports has shown quick growth — “organically” without heavy marketing spend, Brennan emphasizes — in one of the nation’s largest sports betting markets, even while arriving after a nine-month head start by most rivals. Legal online and retail sports betting launched in the state on Jan. 1, 2023.
The November sports gaming report from the Ohio Casino Control Commission showed Prime with betting handle of $5.8 million for the month, good for 10th in the state, ahead of peers such as Ohio sports betting in October.
Took @primesportsbook only 10 weeks to jump into the Top 10 of OH sportsbooks
Offering an alternative to offshore & the street while welcoming players poorly served by other brands seems to have potential
Just wait until we open Q1'24 in NJ, KY pic.twitter.com/5Kxwd8H9F0
— Joe Brennan Jr (@joebrennanjr) January 2, 2024
By the metric of revenue instead of handle, however, Prime was less impressive. Its $12,550 in earnings was ahead of just three competitors, all of which reported revenue losses during November.
When asked by Sports Handle how much significance to attach to the low revenue total, Brennan’s response was short and simple:
“Right now, for the stage we’re at? None.”
Strategy: Attract and profit from sharps 3d4q5k
Brennan, a longtime sports betting advocate who helped lead the to repeal PASPA, created Prime Sports with technology partner Adam Bjorn and Bjorn’s Plannatech company. From the outset, they saw a different niche Prime could fill from the the cookie-cutter operators vying for recreational bettors.
The strategy is highlighted right on the sportsbook’s home page, while emphasizing those who use it are valued as “” (rather than customers who may be limited in bet size by big operators that don’t want sharp play):
“Enjoy high limits and fast payouts, guaranteed, every time you play. … All our are guaranteed the right to wager up to the maximum amount on every betting market, so you never have to settle for less.”
Brennan said the average bet size for Prime has been $2,000, whereas big operators rely more on heavy volume of wagers in the $40 range from recreational players.
“We were trying to attract the guy who has continued to wager offshore or off the street [using a bookie] even though they live in the middle of a regulated market,” he said, noting bet limits can be a particular turnoff to such individuals.
Prime had its own issues serving those customers/ initially, Brennan acknowledged. Its payment processing system for bank transfers was limiting individuals to $2,000 deposits at the outset, which frustrated bigger bettors and had to be resolved.
“Once we did that, our handle took off accordingly,” Brennan said.
Focusing on attracting serious, sharp bettors who know what they’re doing better than Joe Six-Pack may sound questionable as a business strategy, but Brennan has no reservations. He observed how the large operators concentrating on attracting many more small bettors have lost money overall, because their customer acquisition spend has outweighed the revenue they can rely on by virtue of the sportsbooks’ vig or less educated bettors’ failures.
“One thing to keep in mind here is that while there’s a lot of people who might say I’m a sharp or professional sports bettor, it’s not like there is a licensing exam for it,” he noted. “Most of them are not up on us. Most of them are flat to down with us.
“It’s just a matter of managing and scaling from that perspective instead of going down the route of trying to be a big, brassy, consumer entertainment brand and throwing around a lot of [advertising] money and throwing around a lot of bonuses.”
Valuing service over bonus bets 276l3j
A key part of Prime’s customer retention strategy, Brennan said, has been to focus on quality service rather than bonus offers, as the former is more long-lasting than the latter in winning loyalty. As a smaller outfit, Prime has an advantage in resolving any problems, he said.
“We want you to feel like you’ve always got a good book that will always service you well, whether you’re a big-money, whale-type customer or a small customer,” he said. “Right now, when somebody has a problem, we’re all over it. We’re chatting with them, getting on the phone, and I’ve personally responded to people.”
And despite the company’s niche strategy, Brennan does expect to attract more recreational bettors, especially as the big commercial operators reduce their bonus offers with the NFL season winding down.
“We haven’t even cracked our knuckles yet trying to spread the brand and attract new customers,” he said, but that is coming.
And what is also pending is the launch of Prime Sports in New Jersey, with timing this year dependent on that state’s regulator completing review of the company’s systems, and the start of operations in Kentucky, hopefully by April 1.
The New Jersey launch, in particular, is critical to the company’s vision. Prime Sports is operating with a “hub” theory, Brennan said, in that its appeal to big players can draw them across state lines — such as those from Michigan entering Ohio — to make more sizable bets than what may be possible in their own regulated states where Prime doesn’t operate.
“We know that when we get into New Jersey, we’ll also get [customers from] the greater New York City and Philadelphia areas, and maybe Baltimore, because of the type of stakes we’re willing to offer players, and it’s reliable.”
That last point about reliability, he suggested, can be attractive to individuals currently using the offshore books or bookies.
“If we get maybe 10 to 15 percent of their bankroll, that’s a win for us,” Brennan said.
The appeal of Ohio 4e545v
One thing most of Ohio’s operators have been silent about publicly is the state’s New York sports betting market with its 51% tax rate and have allowed since then that 35% would be a viable rate as a requested reduction.
“I don’t necessarily blame Governor [Mike] DeWine and the state of Ohio’s government” for raising the rate, Brennan said. “Am I happy about it? No, but at the same time, that’s reality. … Nobody feels bad for gamblers, nobody feels bad for casino companies.
“Ohio at 20 percent is still a good deal, and we can make good money, but our style is different from everybody.”
He said Prime Sports was attracted to Ohio because it’s a large state with a stable economy, and also one with a long history of ion for both sports and sports betting, even if the latter had to be underground until last year.
The company will also have a retail betting site in the state through its partnership with state-based Geneva Sports LLC. It won’t be a Vegas-style sportsbook or similar to anything in Ohio’s casinos and racinos, however. Instead, it will supply kiosk-only betting in a restaurant expected to open in coming months in rural Ashtabula County, which is too sparsely populated to a full sportsbook, Brennan said.
That location is unlikely to attract the kind of bettors to whom Prime Sports most appeals, but he said there are plenty of them using the app — and other Ohioans who will use it on a smaller scale to follow — to make the future promising.
“We’re holding our own against the toughest bettors out there, people are finding us organically, and we haven’t had to pay to acquire our customers,” Brennan commented. “So far, so good.”
