Since the decision by the Supreme Court for states to have control over the legalization of Online Sports Gambling in 2018 there has been an incredible influx of revenue for media outlets as states throughout the country have legalized online sports wagering.
In a recent article1 from the Wall Street Journal, by Katherine Sayre, the Online Gambling companies are beginning to take a closer look at their advertising expenditures and promotions for new customers to turn a profit.
I had the pleasure of speaking with Sayre for the article and share BIA’s Online Gambling ad forecast. She quoted me in her article saying, “companies are expected to spend $1.8 billion on online gambling advertising this year—including $300 million in New York alone—up from $1 billion last year. That is expected to level off somewhat to $1.9 billion next year, unless another market such as California were to open up”.
As with any new industry or advertiser entering the market, with multiple outlets for online gamblers to choose from, the advertisers jump into the advertising market with a bang to capture market share. Especially in a mobile industry such as online gambling, where once a consumer is comfortable on a platform, they can be very loyal.
Once gamblers have tried various platforms and determine their favorite(s) the advertising costs for acquiring new customers increases. Online gambling advertisers at this stage begin to focus on new markets that are legalizing online wagering and pull back advertising dollars from already established markets. As new markets emerge (California will be voting on the legalization of Online Gambling in November 2022), this money will not all be new dollars to the category, but a portion will be reappropriated from already established markets.
Online Gambling is a vertical that BIA tracks in its U.S. Local Advertising Forecast. BIA is forecasting the Online Gambling vertical to grow at a compound annual growth rate (CAGR) of 15.9% between 2022 and 2026, with the majority of the growth occurring in 2024. This 2024 growth is attributable to the expectation of the legalization of Online Gambling in California.
Other than new states entering the mix, Online Gambling advertisers will continue to run promotional ads to attract new customers, but as the conversion rates per advertising dollars spent decrease, so will the advertising in already established markets.
The outlook for the Online Gambling category remains strong for local media outlets, including over-the-air and digital television and radio, but in those markets with an already established Online Gambling presence, and as Online Gambling companies change their business goals to profitability from the growth of their customer base, the exceptional growth seen over the past few years is expected to slow down.
BIA’s Online Gambling Forecast for both nationwide and all 210 local TV markets is available for purchase. Click here for details. BIA ADVantage clients can login and download the full forecast in the platform now.