The sports betting industry in the US has become one of the most competitive in the country since 2018. As more and more states launch legalized sports wagering markets, operators scramble to scoop up as much of the market share as they can. While word of mouth and reviews are a great way to reach new customers, sportsbook operators have relied heavily on means with a greater reach. Media companies have financially benefited from the competition in the industry and have made millions for broadcasting sports betting advertisements on their radio stations and television channels.
Since a federal judge overturned PASPA in 2018, several states around the US have gone through the legislative processes required to introduce a legal sports betting market to residents in their jurisdictions. There are currently a total of 15 states that have legalised online sports betting, seven that have introduced retail-only markets and five states have expanded their gambling offerings to include online casino gaming such as table games and slot machines. This expansion has been beneficial to more than US residents and operators but also media companies that are tasked with broadcasting marketing materials for the sportsbook brands.
Data from Nielsen Ad indicated that sportsbook operators have spent close to $154 million for advertising on local TV commercials for the first quarter of this year alone. Compared to the $10,7 million that was seen in Q1 of 2019, broadcasting companies have seen a significant increase of business from sportsbook brands. While online sports betting advertising is not a new category for broadcasting companies, it was illegal and taboo prior to 2018. However, in the past two years that sports betting has been legal federally, there are not many who would contest the idea that this category has become the most lucrative for local TV stations.
According to reports from the American Gaming Association, the online gambling industry generated a GGR of almost $785 million from January this year through to March. This indicates a growth percentage of 645 from 2019’s Q1 and a 239% increase for the same period last year. These impressive results have been collected from the five states that launched full-scale iGambling which are Pennsylvania, West Virginia, Michigan, Delaware and New Jersey.
Land-based and mobile sports betting revenue, combining results from all operators, for the first quarter of this financial year amounted to $961,1 million. This is an increase of 451% since 2019 and a 270% increase for the same period last year.
FanDuel sportsbook contributed more than $57 million of the overall number of $153,6 million. FanDuel’s rival, DraftKings, came in at a distant second with $43,6 million. BetMGM spent close to $25 million, BetRivers followed with $9,3 million, Betfair spent $6,7 million, PokerStars contributed $5,8 million to the total and all other brands’ contributions combined totalled $5,6 million.
Before 2018, federal regulations prohibited television networks from broadcasting commercials for sports betting brands. The Supreme Court’s ruling in 2018 resulted in four of the US professional sporting leagues, the MLB, NBA, NFL and NHL, becoming accustomed to sports wagering.
According to the data, sports betting presents sportsbook brands with an opportunity to increase fan engagement and provides TV stations and networks to tap into the lucrative market. TV advertising revenue has declined from 2019’s $84 billion, by 9,5%, to last year’s $76 billion. However, internet gambling and sports betting revenues for advertisers have increased exponentially.
Experts have shared that the obvious change in media and sports industries relating to advertising is significant in that it shows a lucrative growth opportunity for the TV stations. Just last year, online sports betting advertisement spending increased in 108 of the 208 market areas that were being observed.