Research firm estimates U.S. online gambling ad spending to reach USD1.8 B

Last year, operators spent a record $1 billion on online gambling advertising. Now, one research firm estimates that amount will drastically increase.

According to BIA Advisory Services, a research firm for the local media industry, operators will spend $1.8 billion on sports betting and online casino (iGaming) advertising. According to the firm’s forecasts, “The online gambling business vertical is presenting a continuing boost for local media sellers that operate in states where gambling is legal.” “For 2022, BIA estimates that the total nationwide advertising spend will be close to $1.8 billion and, for local markets, this spend can be a win-win for identifying and securing local ad revenue.”

Nicole Ovadia, BIA’s VP of forecasting and analysis, told the Wall Street Journal that ad spending could level off to $1.9 billion next year. That is, of course, a state like California doesn’t join the sports betting industry. The gaming industry is patiently awaiting the outcome of a California sports betting referendum. US operators announce cutbacks

Companies like DraftKings, FanDuel and Caesars are notorious for spending hundreds of millions of dollars on marketing to acquire new customers.

DraftKings CEO Jason Robins said DraftKings had spent $278 million on marketing in Q4 alone. Overall, the operator spent $981.5 million on marketing during the 2021 calendar year. But in recent months, operators have been cutting back in order to focus on their balance sheets.

In February, Caesars CEO Tom Reeg said the company would cut back its ad spending after a $1 billion customer acquisition campaign.

Could new legal gambling states force companies to spend more?

With states like Massachusetts, Maryland and Ohio hoping to launch mobile wagering by 2023, companies will need to invest in customer acquisitions. In doing so, it could push ad spending even higher. The BIA estimates ad spending to reach $300 million in New York alone.

However, as companies look to become profitable by next year, experts anticipate ad spending might actually be on the decline.

BetMGM Chief Executive Adam Greenblatt told the WSJ, “I think what we’re seeing is, everyone, is looking around going ‘Hang on, it’s gone too far.'” “We need to make money. The market, frankly, is expecting us and others to make money.”

FanDuel Chief Executive Amy Howe said the company views things differently: “We’re going to spend what we need to spend in order to be competitive, but we’re going to maintain the same financial discipline.”

by Nicholaus Garcia