U.S. Betting Brands Offer Different Future Plans For Marketing Spend

March 3, 2022
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Following a football season marked by heavy marketing spend, some of the top sports-betting brands in the United States have outlined vastly different fiscal plans going forward.

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Following a football season marked by heavy marketing spend, some of the top sports-betting brands in the United States have outlined vastly different fiscal plans going forward.

Much of the nearly four-year-old sports-betting boom in the U.S. has seen companies spending heavily as each new state comes online in pursuit of acquiring customers and keeping them for the long haul.

Some, including FanDuel, DraftKings and BetMGM, have posted upwards of eight-to-nine figure quarterly expenditures on marketing, and likely by no coincidence, have parlayed that into the top three positions in overall U.S. sports-betting revenue.

Last summer, Caesars Entertainment made its own foray into heavy spending, promising to spend $1bn over a two-year span on marketing to accompany its relaunched Caesars Sportsbook product.

Last week, however, CEO Tom Reeg said the company would immediately begin pulling back on its advertising.

"You are going to see us dramatically curtail our traditional media spend effective immediately,” Reeg said. “We have accomplished what we set out to do."

“We set out to become a significant player, and it's happened significantly quicker than we thought, and I think most of you know me as someone who's not one to spend any money needlessly.”

Reeg said the company would largely be off of traditional media other than in states with new launches.

Meanwhile, on its own investor call last month, DraftKings made clear it intends to continue spending heavily to acquire customers, projecting an EBITDA loss of between $825m and $925m for 2022, an announcement that was followed by a 20 percent decline in company stock.

“Our assumption is that we continue to run very similar new customer promos to what we've run in the past, and that we run similar retention-based promotions around key moments like the start of NFL season,” said CEO Jason Robins. “So nothing's really changed there.

“And I think as we've noted in the past, as states mature, just based on the fact that a higher percentage of promotion is spent on new customers than repeat, you should expect to see natural decline,” he added.

“And then, of course, the mix of new versus mature or more mature, I should say, states will affect the overall.”

Another company that expects its marketing spend to remain similar is PointsBet, particularly as it launches in new markets.

“We have always said as new markets launch, we will market into those states, so as a general rule, marketing is going to increase as we expand our total addressable market,” said Sam Swanell, PointsBet’s CEO.

Swanell also pointed out that some of the company’s marketing through its partnership with NBC Sports and the included regional networks captured a larger share of audience with the company’s recent launches in Pennsylvania and New York, where the company already had marketing exposure through the regional networks in the Philadelphia and New York media markets for its operations in New Jersey.

“That spending goes from being, let’s call it, out of state to interstate, so you automatically get the benefit without them necessarily being an increase in marketing expense,” Swanell said.

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