AGA Study Reveals Sportsbook Advertising Spend Decline

Sportsbook advertising has been a hot topic of conversation in the U.S. legal sports betting industry for a slew of wrong reasons, as many sportsbooks, including our best sports betting sites, have poured millions into making people aware of their existence and their available promos.

The most recent news comes from the American Gaming Association (AGA), which, perhaps because of growing public pressure surrounding the heightened exposure of sportsbooks on the airwaves, has reported a decrease in spending by sportsbooks on advertising year-over-year. 

The study by Neilson showed that ad spending by sportsbooks has decreased for two straight years. 

With the saturation and maturation of the best sportsbooks across the country, the apparent need to splash a company's name incessantly is not as great as it was when new markets seemed to be coming online every month, and sports betting providers were battling for market share in those jurisdictions.

The findings

The AGA found that U.S. sportsbooks spent more than 20% less on advertising in 2023 than they did in 2022. 

The peak of sportsbook advertising, which has been criticized for its oversaturation, came in 2022, when an estimated $2 billion was being spent on sportsbook ads.

By contrast, only $1.2 billion was spent last year on print, TV, radio, and internet-based advertising for participating U.S. sportsbooks, a 21% drop from the $1.4 billion in 2022. Television advertising, the biggest spend by sportsbooks, dropped 23% year-over-year to about $600 million in 2023. That's down from $800 million in 2022.

Of note, sportsbook advertising made up a whopping 64% of all television advertising in 2023. That's thanks mostly to local advertising. On the national scale, sportsbook advertising made up less than 1% of the commercials seen and heard. 

Pharmaceutical and fast food companies have and will continue to dominate the national airwaves when it comes to advertising.

The reasons

Mature markets and the fact that legal sports betting exists in 38 U.S. states have a lot to do with the drop in advertising dollars from sportsbooks. There just isn't the intense market share battle that was taking place when legal sports betting was a relatively new thing in America and new states seemed to be launching every month.

Huge companies with deep advertising pockets like FanDuel, DraftKings, and BetMGM are now able to concentrate national campaigns while foregoing rigorous and expensive local ad campaigns in the states in which they have a presence.

The move toward sportsbook profitability also concerns the lowered ad spend by America's best sportsbooks. Providers moved close to profitability in 2023, and in 2024, some of the biggest companies will float into the black for the first time.

With the move toward profitability comes a more muted spending strategy for sportsbooks. Cost management has become part of the overall plan, instead of customer acquisition being the first, second, and third goal for providers.

Pushback against sportsbook advertising

There has been real public blowback against the seeming oversaturation of sportsbook advertising on the airwaves. The public has been complaining about the inundation of ads during their favorite sporting events, and state and federal lawmakers have also criticized the practice.

U.S. Rep Paul Tonko is seeking to limit sportsbook advertising through his SAFE Bet Act. A group of lawmakers in the Louisiana sports betting scene is attempting to ban such sportsbook advertising in their state, and Kansas legislators are attempting to stop sportsbook advertising across all online media and mobile devices in the Kansas sports betting scene.

Where sportsbook advertising goes from here is anyone's guess. But those who have hit their saturation point regarding the presence of sportsbook advertising and lawmakers who are attempting to curb the prevalence of such ads have to be satisfied with the trend of downsized ad spend by sportsbooks in their jurisdictions.

Ultimately, the best sportsbooks have to be happy as well because advertising budgets continue to diminish across the country.