BIA Advisory Services, a research firm dedicated to the local media industry, has released a report estimating that online gambling advertising spending will reach $1.8 billion by 2022. This is a significant increase from the estimated $1 billion spent on such advertising last year.
The expected growth is due to the increasing popularity of sports betting and online casinos, as well as the legalization of online gambling in many states. Several states are also in the process of either legalizing or launching sports betting.
As more people gamble online, they are exposed to more online gambling ads. This increased exposure can lead to more people trying out online gambling, and it can also lead to more problem gamblers.
According to BIA Advisory Services:
The online gambling business verticle 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.”
IGaming giants have already announced budget cuts and are focused on improving their services. DraftKings announced this month that it will focus on long-term profits.
On the other hand, Caesars cuts the ad spending by $500 million to focus on sportsbook upgrades. This is just a part of their announcement in February that they would slash the budget after its $1B customer acquisition program.
Despite the cutbacks from operators., BIA’s VP of forecasting and analysis, Nicole Ovadia, stated that online gambling ad spending could still increase next year. This estimate still does not consider the California sports betting launch since there is still a case to settle
In addition, there may be a major increase in the coming months as the 2022 NFL season is just right around the corner. The World Series (MLB) and World Cup (soccer) could also play a vital role.
Ohio, Massachusetts, and Maryland are still at the pace of joining this growing online wagering market this 2023.
However, other companies want to be more disciplined when it comes to advertising. Amy Howe, FanDuel Chief Executive stated, “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.”
Adam Greenblatt, BetMGM Chief Executive stated that, “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,” he added.