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Gambling Revenue Helps Genius Sports Move Closer To Profitability In 2023

Written By Derek Helling on March 14, 2024
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Genius Sports, one of the most prominent vendors for legal online sportsbooks in the United States, was in a position that is very similar to those sportsbook operators at the end of 2023. While a profitable quarter and year remain elusive, progress toward those goals is clear.

Genius has shared its earnings report for the final quarter and full year of 2023, showing significant gains in revenue in both periods. The company’s gambling services were a significant part of that growth.

Genius Sports cuts net loss in half in FY2023

At the end of 2022, Genius Sports posted a net loss of over $181.6 million. The latest earnings report from the company shows a net loss of $85.5 million for 2023.

That improvement of nearly 53% year-over-year is partially due to revenue growth. Overall, revenue was up 21% for 2023 compared to 2022, including a 20.7% increase in the final quarter of the year.

The segment of that revenue that the company categorized as “Betting Technology, Content, and Services” experienced the largest growth. That segment was up 32.3% for the final quarter and 31.1% for all of 2023.

Expansion into new markets and further proliferation of Genius’ betting services within existing markets were primary factors.

Genius Sports gains new jurisdictions, builds stronger partnerships

Stronger demand for Genius’ gambling services was a big part of the company’s story for 2023. Over the year, Genius’ sports betting partners launched their services in Kentucky, Maine, and Ohio.

Genius was also able to monetize its live event streaming rights by engaging BetRivers’, Caesars’, and Fanatics’ online sportsbook in its BetVision product. That allows sportsbook app users to stream live events within the apps.

Genius built on that success by collaborating with FanDuel on NFL BetVision in the fourth quarter. Given these developments and more, Genius has updated its expectation for its revenue for the full year of 2024 to $480 million, which would represent a 14% increase from 2023.

If that proves accurate and coincides with other trends, Genius may move even closer to a profitable quarter by the end of 2024.

Reduction of expenses could be a deciding factor for Genius in 2024

Genius did manage to show reductions in costs for 2023 compared to 2022 that were as significant as the company’s growth in revenue. Total operating expenses were down almost 23% year-over-year.

However, Genius Sports’ fourth quarter of 2023 showed gains in the company’s investments in marketing and product development. It’s unclear whether those were due to one-time costs or a sign that efforts to streamline operations have flatlined at Genius.

Revenue seems sure to grow in 2024 as demand for services has already expanded. Online sports betting has gone live in North Carolina and Vermont during the current quarter.

However, further revenue growth through the balance of 2024 will have to depend more on product development and marketing. At this time, there are no other new US markets lined up for Genius’ gambling partners to expand into.

Thus, the first quarter 2024 report could lend insight into how successful Genius’ development and marketing efforts are. Early examples of that development include a new pricing tool for sportsbook operators and a suite of games that partners can implement.

The return on those investments could decide whether Genius continues to move toward profitability in 2024.

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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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