There may be a path to profitability in the legal sports betting business that does not involve cash-burning bonuses or overstuffed same-game parlays but does involve what some may think obvious — taking bets.
That is at least according to Derek Stevens, the chief executive officer of Nevada-based Circa Sports, the physical Circa Resort and Casino, the D Las Vegas, and the Golden Gate Hotel and Casino.
“Our sports betting model gets the benefit of not really anybody else doing it too much,” Stevens told Covers in an interview last week at the Global Gaming Expo (G2E) in Las Vegas. “We're just more oriented toward taking larger bets, working with the sharps, and running a low-hold model. That's our deal.”
Sundays. ? pic.twitter.com/Ju6QRkoMo9
— Circa Las Vegas (@CircaLasVegas) October 15, 2023
And that deal is working for Circa, according to Stevens, who told Covers that their model is profitable. It’s also gradually being introduced in new markets, as Circa’s online sportsbook is now live in Colorado, Illinois, Iowa, and the company’s home state of Nevada. The bookmaker plans to launch mobile wagering in Kentucky before the year is out as well.
All those states have a competitive scene for sports betting sites, with multiple operators duking it out for market share by dangling the prospect of matched deposits or other goodies in front of prospective users.
Being on the starting line can be crucial for larger operators, but Circa has no problem being in the second or third wave of launches, as it caters to a customer more sensitive to prices and limits than bonuses and parlays.
“We don't mind going in a few years later,” Stevens said. “We think that consumers are being educated about betting through all the first-mover companies and we think the model that we bring provides a little bit of a different element that is welcomed by people in the states we go to.”
Crunching the numbers
The comments from Stevens underscore what sports betting has become in the U.S. in the wake of the 2018 Supreme Court decision that paved the way for its expansion.
Whereas event wagering used to be confined to tourists and sharper customers in Nevada — and bookmakers operated accordingly — it is now framed much more recreationally, and customers who win too much or wager too smartly can find themselves limited.
Operators such as DraftKings and FanDuel target customers interested in betting a little to try to win a lot through same-game parlays, not necessarily clients who want to get multiple dimes down on one side of a football game. Those SGPs have higher margins than straight bets (because users lose them more often), but that is what some players want.
Others, however, may want what Circa is offering, which is more of a meat-and-potatoes-type of sports betting, albeit with very healthy portions.
Mike Palm, the company's vice president of operations, said they are able “to come in and demonstrate how we're different and offer an alternative to pretty much a homogenous model that most are using.”
Part of that different model is offering both a “yes” and “no” option for certain betting markets. And, for uber-popular football markets, Palm noted Circa is taking sharp action early in the week (albeit at relatively lower limits) to help it calibrate its numbers quicker than competitors.
For instance, Circa throws up college football lines on Sunday morning in Vegas for games played the coming Saturday. By that Saturday, more casual customers are betting into a line fine-tuned via the wagers of smart people.
“So later in the week, when we're taking larger bets closer to game time, we're at the right number that market should be at,” Palm said.
College Football ?
— Circa Sports (@CircaSports) October 15, 2023
Week 8 Opening Lines
Opening App Limits: $3k Sides, $1k Totals pic.twitter.com/xBn2otBc27
What’s next for Circa is continuing to expand the brand beyond Nevada. The Kentucky launch is on the horizon, and there is the possibility of joining other state markets where the laws and regulations match how Circa operates.
Although it is not yet active in a state with legal iGaming, such as New Jersey or Michigan (or even the Canadian province of Ontario, near Stevens’ hometown of Detroit), that is of interest as well. What is not, at least for now, is moving beyond Nevada with Circa’s famous sports-betting contests, such as the $6-million-in-prizes-guaranteed Millions V pick 'em contest.
Stevens said the contests grew so quickly because there is no rake, with every dollar going in coming back out to pay winners. Circa also covers the difference if the entry money falls short of the guaranteed payout.
Furthermore, the company wants people to come to Vegas to enter its contests. That is because, while they’re there, entrants may book a few hotel rooms, eat a few nice dinners, and hit a few blackjack tables.
“It takes a lot of money to run this,” Stevens said “If we were to do that, we would have to go away from a no-rake model, and I don't know that we'd want to do that.”
Do no harm
But will there ever come a day when Circa offers customers the opportunity to bet $5 to get $200 (or something along those lines)? Probably not.
“It’s just not our model,” Stevens said. “I mean, will McDonald’s ever offer filets? Maybe they will, I don’t know.”
Stevens also stressed that there may not be just one sportsbook that’s best for a bettor. Having multiple apps means having access to odds and lines that differ, which can be the difference between being up or down over the long run.
“It's just really, really important for bettors to make sure you have three different sportsbooks on your phone,” Stevens said. “Because if you don't, you're going to play into a situation where you're just not getting the right value, and it's going to really harm your wallet over time.”
