Sports Betting Advertising On Torrid Expansion Pace

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Data confirm sportsbook operators aren’t shy about spending money to lure bettors, providing windfalls for advertising agencies and media outlets in the process.

sportsbook advertising
sportsbook advertising
Scenes from ESPN’s Daily Wager. Sportsbook operators are spending big on TV advertising. (Image: Joe Faraoni / ESPN Images)

The gaming industry, including regulated sports wagering, spent $488 million on advertising between November 2020 and November 2021, according to Media Radar. Nearly $336 million, or 69 percent of the overall figure, was directed to television advertising — good for 63 percent year-over-year growth.

The majority of budgets came from fantasy sports companies such as DraftKings and FanDuel, with traditional bet makers such as Bet365, Landry’s, Caesars Entertainment and MGM Resorts International joined by online companies such as Flutter Entertainment and Sugarhouse HSP Gaming in the top 10 companies by spend,” reports Stephen Lepitak for Adweek.

Flutter is the parent company of FanDuel while Landry’s references Golden Nugget casinos. Sugarhosue is one of Rush Street’s and Rush Street Interactive’s brands.

Operators Are Spending, Investors Want Payoffs

Following television, digital/online ad spending is the second-largest medium for gaming companies at about $140 million, or 29 percent, through the first 11 months of this year.

By category, fantasy sports and sports wagering is by far the largest, commanding two-thirds of gaming companies’ ad spend through the end of November, according to Adweek. The first week of the NFL season is a microcosm of sportsbook operators’ capital outlays as $21.4 million was spent on ads during league’s broadcasts.

Prior to the start of the season, the NFL struck deals with BetMGM, FOX Bet, PointsBet, and WynnBET as approved sportsbook operators. That quartet joined Caesars Entertainment, DraftKings, and FanDuel with that coveted status.

While ad spending is essential to operators’ efforts to attract and retain customers, investors are waiting for those expenditures to pay dividends. In the first half of the year, FanDuel spent $404 million on marketing and sales to generate $952 million in revenue. That’s while rival DraftKings spent $399 million to drum up sales of $610 million.

In the case of DraftKings, analysts are questioning the company’s advertising and marketing spending with some saying the company’s timeline to profitability is longer than previously expected. Some operators are acknowledging they don’t want to go down the road of heavy ad spending and lack of profitability.

Last month, Wynn Resorts (NASDAQ:WYNN) dropped plans to merge its Wynn Interactive unit with a blank-check company, noting elevated marketing and promotional spending in the sports betting industry make for unattractive economics.

Bet on It: More Spending Is a Given

As more states approve iGaming and sports wagering, it’s a certainty operators will dole out more cash on advertising and some of the upcoming states are home to pricey media markets.

Retail sports betting is legal in upstate New York, but with online poised to go live in that state soon, putting the largest media market in the country in play for sportsbook operators. While it remains to be seen how things shake in Florida, California voters will get their say on sports wagering next November.

Those three states are home to seven of the top 20 media markets in the US.

The post Sports Betting Advertising On Torrid Expansion Pace appeared first on Casino.org.

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