A major increase
US sportsbook and iGaming operators have spent significant sums on advertising this year to secure as much market share as possible.
a staggering 80% year-on-year rise
In 2021, US online gambling operators spent about $1bn to advertise their offerings. BIA Advisory Services is estimating that this figure will jump to $1.8bn for 2022, which would represent a staggering 80% year-on-year rise.
The media industry research firm’s forecast covers ads for both sports betting and online casinos. In its report, BIA Advisory Services said “the online gambling business verticle is presenting a continuing boost for local media sellers that operate in states where gambling is legal.”
Potential leveling off
Speaking to the Wall Street Journal, BIA Advisory Services vice president of analysis and forecasting Nicole Ovadia predicted a leveling off of ad expenditure next year, reaching around $1.9bn. However, that’s assuming that the country’s most populated state California does not launch a sports betting sector. This will become more clear in November, with referendums due to take place on the topic.
There are numerous reasons for the significant increase in ad expenditure in 2022. One of the big drivers was the launch of the New York sports betting market, which has regularly been the best-performing state in terms of handle since its first month. The FIFA World Cup at the end of the year is also set to generate a lot of sports betting activity, with the international soccer competition only taking place every four years.
Some operators cutting back
FanDuel, Caesars, and DraftKings have led the charge in regard to ad spend, forking out hundreds of millions of dollars to try to get new users on board. In Q4 2021, DraftKings spent $278m on its marketing efforts.
a number of betting operators are cutting back
Some industry minds and onlookers have questioned the prudence of spending such large sums on advertising. In fact, a number of betting operators are cutting back after realizing that they can’t compete. Caesars and WynnBET are two operators that have committed to significantly reigning in their ad spend.
