• 2022 brought the sports-betting industry down to earth, as US competition intensified and investor priorities shifted.
• We asked execs at DraftKings and other companies to reflect on the year and make 2023 predictions.
• They touched on trends including microbetting, the new competitive environment, and online gambling.

2022 was a reality check for the US sport-betting industry.

After fantasy sports, casino, and media companies flocked to the sector — pouring money into winning over US gamblers — the public markets cooled on sports-betting stocks last year and funding became harder for startups to come by.

Investors turned their attentions from growth at all costs to the path to profitability.

Companies including DraftKings adapted to the changing environment by focusing on marketing "efficiencies" that reined in costs. Others, including FuboTV's Fubo Sportsbook and Carousel Group and magazine brand Maxim's MaximBet, cut their losses and backed out of the sports-betting business. Some brands that were expected to make splashy entries in 2022, such as Fanatics and ESPN, instead bided their time and prepared to make moves in the new year.

There was also a shift in the regulatory environment, as the strong momentum the industry had experienced in recent years showed signs of waning. Lawmakers in New York, Kansas, and other places that had legalized sports betting started taking a harder look at the consumer protections in place.

With the industry in flux, Insider asked five top sports-betting execs what surprised them about the industry in 2022 and to share their top predictions for the year ahead. Insider condensed their responses below, which are listed in alphabetical order by company.

Betr founder and CEO Joey Levy thought we'd see more M&A last year, but says it's a preview for what we'll see more of in 2023.

Simplebet cofounder Joey Levy is banking that the "idea of making every moment in a sporting event an accessible betting opportunity," which is known as microbetting, is the future of US sports betting.

His latest venture, Betr, which he founded with influencer and boxer Jake Paul, combines this breed of gambling with media in a new sports-betting app. Users can bet on how many free throws the next NBA player will make on their trip to the line, or if the New York Giants' first drive in this Saturday's game will be a touchdown, field goal, punt, or turnover. 

The platform launched in September with a free-to-play experience, and began testing real-money betting in Ohio on January 1.

In December, Levy sat down with Insider to reflect on 2022 and speculate on the year ahead.

Levy's 2022 prediction that came to fruition: "A heightened focus on getting the unit economics back on track and focusing on profitability and sustainable growth ... reducing customer acquisitions spend, thinking through how to be more efficient and creating a path to profitability. That's something I predicted would happen because I felt like a lot of the customer-acquisition initiatives were unsustainable."

One thing he thought would happen in 2022 that didn't: "I probably would've thought there would've been a little bit more M&A in 2022. I think you're going to see more in 2023."

His predictions for 2023: "2022 is a good preview for what you're going to see a lot more of in 2023.

Everybody is taking a step back and prudently taking the time to reevaluate the landscape... In 2023, all these things are going to ultimately come to a head.

There are some assets that candidly are going to run out of money in 2023-24 ... For the people that are sitting on healthy balance sheets that have clear path to profitability, there's going to be really interesting opportunities in M&A.

I also think we'll see a lot of focus on product innovation. For the first 4 1/2 years or so ... it was kind of like, 'let's just get these product up and running ... and then worry about product innovation later' ... I think now there's going to need to be more of a focus on that."

DraftKings CEO Jason Robins braced in 2022 for a more 'rational' competitive environment, and is looking to new state rollouts including Ohio this year.

In a tough year for US sports betting, DraftKings CEO Jason Robins managed to solidify his company's standing as one of the US's largest sportsbooks, while keeping one eye on the future — completing in 2022 its acquisition of Golden Nugget Online Gaming to expand into online gambling, and experimenting with NFTs and social gaming. 

While DraftKings still faces challenges, including achieving its goal of becoming profitable on an adjusted EBITDA basis by Q4 2023, the company has made strides in recent quarters in reining in marketing costs and narrowing its losses.

Robins reflected on 2022 and shared his predictions for the coming year over email in December.

Robins' 2022 prediction that came to fruition: "As anticipated, the competitive environment became more rational over the course of 2022 after the year began with New York's online sports betting launch and a flurry of what we believed to be unsustainable promotions offered by some of our competitors. Since the end of Q1 2022, we are seeing more balanced marketing practices prevail in the industry. In particular, we believe that the 2022 NFL season to date has featured a far more rational competitive environment than 2021."

One thing that surprised him in 2022: "Maryland launching in 2022 before Thanksgiving was a surprise since the state was projected to launch later on for the Super Bowl. This arrival has allowed consumers to experience NFL betting since Week 12 among other sports to help the market scale sooner."

His prediction for 2023: "We expect launches in states that have legalized mobile sports betting and are pending launch, subject to regulation, will significantly grow the industry in the year ahead. In particular, Massachusetts and Ohio both boast strong sports markets, and Ohio's top 10 population size could translate into one of the largest legalized betting markets nationally. There will potentially be even more states that pass legislation next year authorizing mobile sports betting, which could lead to additional launches in late 2023 and 2024."

Gaming Society founder Jaymee Messler was surprised California rejected sports betting, but thinks the 2023 Women's World Cup will be a watershed moment for women's sports.

The Players' Tribune cofounder Jaymee Messler founded Gaming Society with NBA legend Kevin Garnett to help make sports betting more accessible and to cater to fans, including those who may be underserved by other platforms, such as fans of women's sports. 

The company educates new bettors on its website by teaching the basics of betting, then offers simple ways to bet — including free options — that allow new bettors to dip their toes in sports betting.

One of Gaming Society's main focuses is on women's sports bettors, as seen in its "Bet On Women" section. The company partnered with the WNBA to create a free-to-play predictor game with an eye towards educating women's sports bettors and growing the women's game through betting. It also announced in October a partnership with FanDuel, with the sportsbook aiming to target the women's sports audience.

"I think it's clear that there is an interest for gaming around women's sport or even through the data that we've gotten already from the free-to-play game," cofounder Messler previously told Insider.

Messler shared her thoughts on 2022 and the year ahead with Insider over email in December.

One thing that surprised Messler in 2022: "How quickly things have evolved in the sports-betting space and how integrated it is already into broadcasts, arenas, and stadiums. There is an even greater need for sports betting education so fans can catch up."

One thing she thought would happen in 2022 that didn't: "Sports betting getting legalized in California!"

One prediction for 2023: "The Women's World Cup will be a huge moment for not just women's sports coverage, but shifting the focus around emerging/women bettors and fans of women's sports."

PointsBet's US CEO Johnny Aitken thought there'd be more US momentum for online casinos by now, but thinks Fanatics will shake up sports betting in 2023.

Australian betting brand PointsBet made its first splash in the US in 2019, when it launched in the country as legal sports gambling was spreading to more states. It followed that up in 2020 with a big-ticket marketing partnership with NBCUniversal.  

While its sportsbook isn't as big as market leaders FanDuel or DraftKings, it's nabbed an audience by focusing on in-play betting, or wagers placed during a live matchup. 

US CEO Johnny Aitken told Insider in September 2021 that he thinks PointsBet can win at in-play betting by owning its own tech and leveraging its experience internationally, where in-play betting is table stakes.

He caught up with Insider over email in December.

Aitken's 2022 prediction that came to fruition: "We as a team at PointsBet knew we would head into 2022 with most of our efforts focused on elevating our live-betting product – and we've seen that same sentiment throughout the industry, with mass adoption and growth of live betting as a percentage of overall handle and bet count. This is in line with what we see in the mature European sports-betting market, where live betting accounts for roughly 75% of overall handle; we expect the US to not only meet that but exceed it in the next two years."

One thing he thought would happen in 2022 but didn't: "Heading into 2022, all eyes were on growing the online-casino market, but it has ultimately moved at a significantly slower rate than anticipated, with legal online casinos only currently available in six states. We expected vast growth across the country and mass adoption of this line of business, but many states have opted not to push for legalization, leaving a lot of tax dollars on the table."

His prediction for 2023: "It has been a topic of conversation for some time now, but I firmly believe Fanatics will enter the market next year, leading to added pressure on competitors to acquire and retain both mass market and general sports fans who bet here and there. This casual bettor cohort is already highly contested in the space and will only escalate in 2023, creating a need to find ways to stand out and capture as much of that market as possible in a competitive and crowded landscape."

Sportradar's Andrew Bimson thought sports betting would become more personalized, and has his eye on AI and computer-vision technology to advance data capturing.

Sportradar is one of the largest tech and data providers in the US sports and gambling industries.

The Switzerland-based company works with major US sports leagues including the NBA, MLB, and NHL, and provides sports data to many of the leading sportsbooks for real-time betting.

The company in January 2022 named Andrew Bimson as its chief operating officer for North America, a new role in which he oversees the growth of the company's betting and gaming, media solutions, and marketing services businesses.

Bimson shared his perspective on this past year and his predictions for 2023 with Insider over email in December.

One trend that surprised Bimson in 2022: "The industry made great strides in 2022, and the continued adoption of 'in-play' betting drove some of that upside. But there continues to be a massive untapped opportunity. While new products are being rolled out to capture the in-play market, efforts need to be accelerated to meet consumer expectations as they look for exciting ways to engage with the sports they love."

One thing he thought would happen in 2022 that didn't: "There is an incredible volume and wide breadth of available fan data. I'm surprised that the sports-betting user experience hasn't kept up with that change. Within a highly consumerized environment, personalization is a critical component to user acquisition and retention, as well as establishing loyalty. The continued application of a wide range of technologies will make sports betting more user friendly and easy to enjoy."

His prediction for 2023: "Next year will be the five-year anniversary of PASPA being overturned. For the continued evolution of sports betting to become a reality, fast, accurate and efficient means of capturing, producing, and distributing content are vital. As a result, we will see an accelerated adoption of AI and computer-vision technology to automatically capture data that will be immediately integrated into products and solutions that are distributed to betting and media partners."

This story was first published on December 23, 2022 and has been updated.

ncG1vNJzZmivp6x7o8HSoqWeq6Oeu7S1w56pZ5ufony2v4ysp6iqpKh6o7HTraCnn12pv6a6w6xkqaqVmbakwMiopaxlYmV%2FdHnAnJqoqpSeu6h5yKebrqukp8Zusdeemqw%3D