It is not surprising that the market attracts significant international attention, given the US’s vast sporting scene and the lucrative revenue margins in state regulator reports.
Building strong brand recognition in a country with many established local operators is crucial. The German-founded Tipicohas achieved success in its marketing strategy. Tipico USCEO Adrian Vellaexplained the New World Opportunityseries to SBC.
“Let’s make it interesting”
Tipico’s stateside marketing strategy is based on two pillars. One, it focuses on hyperlocality. In Ohio, this means that the bookmaker presents itself as the local sportsbook for Ohio fans’. Two, it adopts a general approach to ‘amplifying emotion’.
Vella stated that there is a strong perception of Vella as a brand with German heritage and German quality.
“Through our history, we amplify the emotions of millions and that adds weight. We love sport and want to be a brand that amplifies emotions.
“Sports are serious, so don’t expect to hear low common denominator ads from us. It’s all about emotion, as demonstrated by our tagline, “Let’s Make This Interesting”.
Ohio is the latest state of the group. It was opened on the day one of the regulated market.
The firm has partnered with prominent newspapers such as USA Today, and Columbus Crewsoccer club, and AEG to host events in bars and venues that are affiliated with the former.
Vella reiterated the group’s position on hyperlocality, saying: “We are trying be the local sportsbook in Ohio for Ohio fans. That is a very distinct position from a lot other national bookmakers.
“There are many things that make a strategy: being the first to move, having creative assets and faces to your brand, communicating that entices customers and shows that they are being heard – but trust is important.
“When you partner up with communities with brands people are familiar with, it adds weight and credibility to your efforts, especially when you compete with long-term local casino brands or firms with large marketing budgets.”
New Jersey’s beachhead
Vella pointed out that Tipico is a well-known brand in Germany’s home market. As such, when international growth opportunities arise, the company will not be content.
After identifying the US as the ideal location for its hyperlocal approach to technology and experience, the next step was to secure access to the market. Tipico USA is now live in New Jersey and Colorado, Ohio, Ohio, and Iowa. Plans for launch in Indiana are underway.
The US is a marathon, not a sprint. There is great potential due to the size of this market. Three years ago we decided to create a US-based company with its own operations, management on the ground, and its own IP and proprietary tech.
“Most of our competitors are using B2B suppliers or sourcing technology from Europe. But if you want your company to be competitive, you must invest in greenfield tech that is built for the US customer and managed by a US team. This is what we did.
“We now have a product that is competitive on the market that’s multi-state. It runs a casino and sportsbook with its own trading and modelling. We also retain customers.
However, online gambling is now legal in 30 US states, with the majority allowing sports betting. So why did Tipico make New Jersey, Colorado and Ohio the only choices for Tipico’s slip of bet slips?
Vella explained the reasoning behind the group’s decision by starting with New Jersey. It is obvious that the Northeastern states are a strong option for market entry for anyone who has any knowledge of US industry.
Tipico’s multi-product launch was launched in New Jersey, which is a long-regulated state. It then moved westward to Colorado to try its hand at multi-state operations.
He said that New Jersey had been regulated for some time, and we knew it would remain competitive.
“We now have four states, and Ohio is the centrefold. This is because Ohio was our first state to open with the market. This is where our investment has led to.
The marathon
Vella wanted to emphasize that expanding and launching in the US is a marathon and not a sprint. It requires preparation and pace.
He noted that the industry is in its ‘goldrush’ era and is “making strides” with more states opening their markets for regulated betting. Many companies are also making moves.
He said, “It’s big enough for everybody and there’s a market for a great product for sportsbooks where we can take advantage of a good portion of the market.” Our focus is on efficiency, driving good products, providing the best customer experience and maximizing our P&L.
As the market matures, we are seeing less bonus spending. Market overall benefits from the increased awareness of P&L by the competition than it was two years ago.
Marathons aren’t easy. Rolling out in the US as a betting company with European roots is no different. Vella however stated that Tipico has found its rhythm.
“When we began, the US was booming. So we had to enter bidding wars for market access. It was difficult at the time, but the status quo has changed.”
Tipico has not found regulation a problem. It is relatively simple to overcome cross-state differences, according to the US CEO. He added that it has only positive effects.
He said, “They have a process different for each state – some have there own labs while with others you go through GLI and some have their process for managing.”
“Regulation is the ability to play on the same battlefield with all the same rules. It is essential and adds value to both the market and the customer. It is also good for business.”
Any European company interested in the US must be aware of the stark ‘black and blue’ differences between consumer preferences.
You only need to look at the US sports calendar and you will see that American sports fans tend to have more varied tastes than their European counterparts.
“In Europe, soccer is the most lucrative sport. Tennis and tennis are next. The tail goes for all other activities.
On a calendar basis in the USA, January and February are when football is played. The Super Bowl follows by March Madness. From April through July, you can find MLB and hockey. The NFL then starts in September.
“The calendar’s reach is enormous and the content pool is vast, especially when you consider college sports. This does not include the product depths – bet builders, player props and all other things.
“An interesting behavior that comes from fantasy is that people in the US follow players more. Customers love to combine one event and player props and parlay bettings.
Transatlantic lessons
Tipico USA’s CEO stated that the company has a long history in Europe. It has been in business for over 15 years. Much of this is due to its technology.
The firm’s rollout was aided by the ability to apply lessons learned from the Old World to New World, such as leveraging knowledge and investing greenfield technology.
Vella stressed that Tpico’s central operations in Europe and the US are centered on a “very talented management team”. The company is highly respected for its control over technology and trading, which are all rooted in years of experience.
He said that sportsbook is the heart of our group’s DNA. When you have the right expertise, you can create a great operation. You can build it multiple times until you are satisfied. Then, trading, betting and marketing will be efficient.
Vella believes that trading is a market where US players can draw inspiration from the established brands on the mature European markets.
He said, “There are also lessons to be learned from retention, bonus allocation, and driving an efficient P&L.” “The US has seen a cycle of mass acquisitions, while European businesses have been optimizing that for years. These areas are where we can most benefit from Europe’s experience.
This is not to suggest that the US doesn’t have tricks the European old dog may want to know. Vella cites in particular the American firms’ tendency to be more ‘bullish and open to new ideas.
American businesses “test and learn” and are open to new products, niches, and services that will appeal to their customers. This is evident in the rise of micro-betting sites.
There are many companies that try different things. Given the size of the market, the amount invested in it, as well as the product offer, many firms are trying to accelerate the pace of betting.
But, American and European consumers and businesses have one thing in common: “Everyone is using an app as a community, whether it be for dating or cabs or groceries or betting.”
Vella stated that people on both sides are used to certain levels of commodity, experience and usability. Tipico hopes to meet this demand on both continents.
He stated, “We believe there’s a market for a really great product on the marketplace that is doing something else,” and concluded that Tipico USA, which focuses on tech, engagement, and hyperlocality is determined to pursue it with enthusiasm.
