After NBA and NFL games, more sportsbook ads ran (from Jan 1-Aug 15, 2023) on Friends than any other … [+]
The ad spend of sportsbooks have emerged as one of the fastest product categories in the marketplace. Disqo forecasts total ad spend for sports wagering in the U.S. to reach $2 billion in 2023, an 8% increase from the previous year. Fueling the growth has been states approving the legalization of sports wagering since the 2018 Supreme Court decision. Although still unavailable in California and Texas, at present, there are 34 states (and Washington, D.C.) with some form of legalized sports wagering available. Several more states are expected to be operational by year end 2023.
In the past, with the popularity of the NFL and college football, the advertising strategy of legalized sports gambling had been seasonal, with a focus on fourth quarter. Among the findings, of a recently released Sports TV report from iSpot, found sportsbook ads are becoming more year-round. Among the findings was sportsbook ad impressions for national TV grew by 25% year-over-year in the January 1-August 15, 2023 time frame.
Despite a number of premier sporting events televised from Jan 1 to August 15, including the NBA regular season and postseason, NCAA Men’s and Women’s basketball tournament, Triple Crown horse racing and this year’s FIFA Women’s World Cup, iSpot found 41.3% of sportsbook TV ad impressions were delivered during non-sports programming compared to 25.9% in 2022.
While a large number of sportsbook ads still air on live sports programming, such as the NFL and NBA, the ad rate is costly and increasing. The new 11-year NFL TV contract kicks in this season coming with an 80% price increase, the networks will pass the increase to sponsors. Also, the NBA media rights contract expires after the 2024-25 season with media rights more than doubling and possibly tripling from the current agreement.
As a result, iSpot found a growing number of sportsbook ads are now airing on non-sports programs, among them are Friends, Paw Patrol Live, South Park and Young Sheldon. All four programs rank in the top 10 of national television impressions with sportsbook ads. Among all TV networks TNT led with 17% of television impressions, followed by Fox (10.2%) and TBS (7.8%). Although sports programming accounted for 58% of total television ad impressions, last year it had been 74%.
Furthermore, iSpot found between August 1-August 15 FanDuel accounted for nearly half (48.8%) of total national TV impressions. DraftKings was a distant second with 20.7% of total TV impressions followed by BetMGM at 16.4%. Eilers & Krejcik Gaming reports FanDuel is also the category leader with a 44% market share of U.S. gamers.
As the sports betting category matures there continues to be fluctuations. For example, FOX Bet, which had accounted for 2.9% of total TV impressions earlier this year (primarily on Fox)
As the sports betting category matures there continues to be fluctuations. For example, FOX Bet, which had accounted for 2.9% of total TV impressions earlier this year (primarily on Fox), closed its doors in late July. FOX Bet, had been launched in 2019, but failed to gain traction and had a market share of under 1% at the time of its closing. Axios reports similar smaller sportsbooks including MaximBet, Fubo Sportsbook, among others, have also shut down their service in the past year.
With some sportsbooks closing shop, others have been opening their doors, most notably ESPN Bet. Looking for new revenue sources and targeting younger age groups, Disney announced the launch of ESPN Bet in August with PENN Entertainment. Under the agreement, PENN Entertainment, will rebrand Barstool Sports to ESPN Bet, will pay ESPN $2 billion over the next ten years for the use of their name. Notably, PENN (and not Disney), will manage the sportsbook operation.
ESPN Bet is scheduled to launch this fall in 16 states. With the imminent launch, iSpot notes FanDuel, DraftKings and Caesars could be losing valuable ad placement opportunities on the cable network. This year, through August 15, ESPN accounted for nearly 7% of total sportsbook impressions ranking fifth among all television networks.
Another recent entry is Fanatics Betting and Gaming which became operational in four states last month. In addition, Fanatics’ $225 million acquisition of PointBet’s U.S. market will provide entry into 16 additional states. With a market value of $31 billion, Fanatics had outbid DraftKings.
In the five years since the U.S. Supreme Court decision allowed for states to legalize gambling, over $220 billion have been wagered on sports. As more states legalize sports wagering, the American Gaming Association reports in the first half of 2023, gaming revenue reached $32.7 billion, a year-over-year increase of 12%.
