- The sports betting market will grow to $9.2 billion by 2025 according to a report by J.P. Morgan.
- DraftKings was estimated to spend $93 million on advertising through the first three quarters of 2020.
- Major media outlets such as ESPN, FOX Sports, and Bleacher Report have all incorporated sports betting content within their programming.
- Sports betting companies have taken the route of online advertising, partnering directly with professional sports teams/leagues, as well as signing celebrity endorsements.
NEW YORK – Sports fans across America are turning on their TVs, radios, computers, phones, and are experiencing a bit of Déjà vu.
They can’t seem to get away from the flood of advertisements from companies like DraftKings and FanDuel. Except now, instead of fantasy, it’s sports betting taking center stage.
Legal sports betting has become the star of the media buying, advertising, and overall marketing industry ever since the repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA) in May of 2018.
What was once a niche the Nevada and Las Vegas has held on to for decades has now become common practice and widely accepted across the U.S. State legislatures have played a part in its spread, with over half the country having legalized the activity.
However, its acceptance and the narrative surrounding it have changed due in part to marketers pushing this type of gambling into the mainstream.
Nothing seems to be off-limits when it comes to marketing and sports betting. With what promises to be a growing multi-billion dollar industry, it’s no wonder companies are taking every measure possible to gain market share.
How Big Is The U.S. Sports Betting Market?
The U.S. sports betting market has grown consistently from year-to-year and the amount spent on legal sportsbooks has also grown steadily month-over-month.
There are now 25 states that have legalized sports betting plus Washington D.C. Of these states, 20 have launched sportsbooks either at retail locations or online.
In total, American sports bettors in 2020 alone spent close to $35 billion in sports bets. The amount kept in revenue for the sportsbooks differed in each state. Sportsbooks tend to keep between 5-7% likely resulting in $2.1 billion in revenue.
This market is expected to grow profoundly in the next few years as key states such as Florida, Texas, and California have yet to sign sports gambling into law. New York also hasn’t signed online sports betting into law, but they are on the cusp of doing so.
All in all, investment firms and sports betting companies are predicting the industry to balloon in the coming years.
In 2019, investment firm Morgan Stanley estimated that the U.S. market alone would generate almost $7 billion in 2025. That estimate has only risen over time. Just this month, investment firm JP Morgan estimated the market will be worth $9.2 billion in sports betting revenue by 2025.
An exponentially growing market means the greater demand for marketers to help claim a piece of the pie.
How Much Are Sportsbooks Spending On Marketing And Advertising?
Each state that has legalized sports betting has put a different cap on the number of sports betting companies that can operate there.
While some states such as Rhode Island, Oregon, or New Hampshire only have a single operator, other states like New Jersey or Colorado have over a dozen sportsbooks within their borders. The greater the competition, the more advertising dollars required to establish a brand.
“Brands are fighting this long hard battle for market share, rising customer acquisition costs and getting high churn rates,” said Dave Edwards, exec VP of global business development at R3 Worldwide. “It’s hard for these sportsbook companies to differentiate themselves. Legally they’re really all the same, all regulated by the state and licensed.”
The amount spent to make their brand name known varies between companies, but the ones at the top are no surprise.
The three sports betting companies that, on average, take in the most sports bets per month are DraftKings, FanDuel, and BetMGM. They are all the highest spenders as well.
According to Kantar, from January to September, DraftKings was estimated to have spent $93 million in paid media. FanDuel came in second with $61.2 million in paid media and BetMGM came in third with only having spent $8.1 million. All of these estimations didn’t even include paid social media advertising.
However, the start of football season saw an explosion in the amount spent on marketing costs.
In the third quarter of 2020 alone, DraftKings spent $203 million on sales and marketing. As for FanDuel, they were estimated to spend between $185-$210 million within the same time period.
BetMGM has caught on to the fact that in order to compete with the top dogs in the industry, they’re going to have to spend money to make money.
BetMGM’s parent companies MGM Resorts and GVC Holdings (now known as Entain plc), committed to a second round of investment of $450 million dollars in July of 2020 in order to elevate the brand as a market leader.
“We launched this business to combine the best of MGM Resorts and GVC, and establish BetMGM as a leading brand in the US sports betting and iGaming markets,” said Adam Greenblatt, CEO of ROAR Digital, LLC at the time of investment. “With broad market access secured, our long-term technology foundations now firmly established, and a high performing team in place, this further unequivocal support from our two shareholders will ensure we can achieve leading market positions in this exciting industry that is growing even faster than our initial expectations.”
It’s safe to say, those within the industry aren’t afraid to shell out large amounts of money to stand above the crowd. This is to the benefit of those in the marketing field.
How Are Sportsbooks Advertising?
No avenue seems to be off-limits when it comes to sportsbooks getting their name in front of the general public.
Along with those in paid media, those within content marketing, affiliate marketing, digital marketing, have seen sports betting enter their area.
“Each state is a market unto itself, and there isn’t just regulatory complexity but marketing complexity,” said Mike Raffensperger, FanDuel Chief Marketing Officer. “As we think about media markets, promotions and local influencers, it is a question of where are the places we can leverage our assets at scale, and how do you put the right people and resources in place?”
For example, last month BetMGM became the exclusive sports betting partner for The Athletic. The deal entails The Athletic using BetMGM specific odds when publishing articles through their digital sports content platform.
Caesars Entertainment, (which now owns William Hill) also hopped on the content marketing bandwagon in February of 2019 when they signed a deal with Turner Sports. The deal allowed Caesars to host a Bleacher Report studio within Caesars Palace Las Vegas to push sports betting content.
Other methods that sportsbooks have taken include major celebrity endorsements.
The biggest of these deals came this past September when actor, musician, and artist Jamie Foxx signed a deal to star in BetMGM’s latest brand campaigns. However, other sportsbooks have taken this route as well.
All great teams surround themselves with greatness.@iamjamiefoxx Welcome to @BetMGM #TheKingOfSportsbooks pic.twitter.com/IhSNHVv40K
— BetMGM 🦁 (@BetMGM) September 22, 2020
FOX BET, has been able to utilize the former athletes and now celebrities that work for FOX Sports. Former NFL superstars and now NFL analysts Howie Long and Terry Bradshaw have become brand ambassadors to FOX BET.
But, one of the most popular methods of increasing brand exposure and creating credibility in sports betting has been the use of professional leagues and teams signing deals with retail and mobile sports betting companies.
The NHL has signed deals with the likes of William Hill, PointsBet, BetMGM, and FanDuel. The NBA has also signed with William Hill and PointsBet as well as other partners such as theScore and DraftKings. This is in addition to over a dozen teams across professional sports that have signed deals with similar companies.
The advertising in those team’s stadiums and on television broadcasts of those leagues has accumulated in greater brand awareness and greater amount spent on sports betting.
What Are Marketers Betting On?
The growth of sports betting in the U.S. hasn’t reached full maturity. This means that there is still an opportunity for sports betting brands to establish a presence in 25 other markets. This also means billions more are expected to be spent on marketing and advertising over the course of the next few years.
Right now, 11 states who have yet to legalize the activity have active sports betting bills within their state legislature. While not all of them will be signed into law in 2021, several of them are expected to.
On top of this, states such as Louisiana, Maryland, and Washington which legalized sports betting last year are expected to launch later this year.
Along with the number of markets increasing, the advertising methods are also set to increase as Google announced last month that they will now allow sports betting apps into the Google Play Store. Google now also allows paid advertising in markets where sports betting is legal.
With all this in mind, it’s safe to say, the odds are favoring sports betting to be a winning bet for those in marketing for the years to come.
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– In his career, Hasan has worked both local and state government positions—including the Attorney General’s Office in Florida. On top of being familiar with the legislative process, he has also been researching and writing on the legality of sports betting across the US. Outside of work you’ll most likely find him producing or playing music, playing sports, or working on creative writing projects. You’ll also catch him at Doak Campbell Stadium cheering on the Noles.