Sports betting is here to stay, in the US and around the world. Like any industry, gambling operators want to be able to advertise to attract more customers. However, some believe that there is too much advertising. Countries like Italy, the UK, Australia and others are tightening up on how much – and when – gambling advertising is allowed. The same restrictions will soon enter the US market as well. Gambling ads to face sanctions
According to Nielsen Ratings, the cost of TV commercials for online gambling increased to $725 million in 2021 from $292 million in 2020. This is because gambling companies spend three times more on advertising than grain companies.
There is still a lot of room for growth. Nielsen indicates that gambling-related ads make up about 1% of the TV advertising market. According to data from a New Barron’s report, the auto industry spends $7.9 billion each year.
As gambling expands into new markets, with huge TV audiences and high-priced advertising rates, spending is sure to increase.
In an increasing number of states, gambling operators are competing for market share. 11 states, including Connecticut and Michigan, will go live with online gambling in 2021. New York has just joined and California could enter this year. Before entering Florida it was forced to withdraw as part of a larger dispute that continues today.
There are over 12 bookmakers competing for the position in several states. Companies that are well funded and able to offer promotional offers to new customers, as well as bankroll large media campaigns, have the advantage. According to Nielsen, 93% of TV advertising spending in 2021 was spent by four operators, DraftKings, FanDuel, MGM Resorts International and Caesars Entertainment. All four now offer online casinos in addition to online sportsbooks.
Big expense with little reward
Allen said that despite all the negative pressures about the level of marketing and promotional spend, it has created a highly concentrated market where only the big players can compete. In many cases, operators are spending more on marketing than they are earning to get to the front.
Regulators and legislators have begun to pay attention to television commercials. They are concerned about the messages being sent.
New Jersey Assemblyman Ralph Caputo is the chairman of the state’s committee on tourism, gaming, and the arts. A former casino, he now believes it’s time to limit ads. He now calls the amount of gambling commercials he sees on TV “insane” and wants the ban to be imposed.
Some industry insiders believe the new rules are not necessary. The American Gaming Association states that operators police themselves and have a collectively responsible marketing code.
That likely won’t be enough to please lawmakers, especially in an election year. The gambling industry should start preparing for stricter sanctions from now on how they are to market, knowing that the arrival of stricter measures is inevitable.