The record-breaking spending has been propelled by two primary factors:
* 39.2 million placed sports bet in last 12 months
* 71% bet on sports at least once a week
* 20% bet on sports at least once a day
* Average bet between $20-$35, less than 2% more than $100
During the five years since the Supreme Court granted states the authority to sanction and regulate sports gambling, three-fourths of the states (37) plus Washington DC passed legislation legalizing some form of sports betting (See Figure 1). In the past 3 years alone, 17 states (nearly half) have legalized sports gambling, contributing an additional $103 billion to the amount wagered in 2023 (2). The cumulative annual growth rate of 80% from 2018 ($6.5 bn) to 2023 ($124.5bn) highlights the exceptional popularity of sports betting in America. This rapid growth does not include two of the most populous states, California and Texas, which have yet to legalize sports betting.
Sources: American Gaming Association, U.S. Legal Sports Betting, December 7, 2023; R. Best & D. Howard, The Business of Sports (2023), Chapter 4
The rapid growth of legalized betting ignited an explosive market for sports gambling advertising as casinos and sportsbooks compete aggressively for a share of the massive customer market. The gambling industry spent $488 million on advertising between November 2020 and November 2021. In just 2 years, advertising spending has more than doubled exceeding $2 billion in 2023 (3).
Fan Duel and DraftKings dominate sports betting advertising
The “tsunami” of gambling promotions has infiltrated every available commercial advertising outlet including TV, radio, social media, billboards, and podcasts (4). Many of these pitches are made by popular celebrities such as comedian Kevin Hart (DraftKings), NFL star Rob Gronkowski (FanDuel) and the Manning family (Caesars Sportsbook) who urge fans to place bets on the online betting apps of three of the largest betting sites.
Beyond ads, major networks now offer programming dedicated to sports gambling. ESPN’s Daily Wager show highlights point spreads and money lines for sports bettors and Fox Sports 1’s Locked It In offers expert advice on hypothetical wagers for upcoming sports events. In addition, television networks broadcasting live games of each major league in North Americas now air multiple sports gambling commercials. The only league to limit commercials, the NFL, allows up to six sportsbook commercials a game. In contrast, the NHL fills about 12% of it’s commercial inventory with sports betting ads (5).
“Sportsbooks such as DraftKings and FanDuel – companies that set the odds and take bets –
have unleashed an advertising storm, intent on scooping up as many customers as possible.”
– National Public Radio
The barrage of television ads is driven by the four largest sportsbooks, led by DraftKings and FanDuel, followed by BetMGM and Ceasars. The latter two gambling enterprises have aggressively pivoted from their exclusive casino retail operations to gain a share of the fast-growing online sports betting market.
Online/mobile sports betting has become the dominant platform in U.S. states where it is offered. In 2024, 26 states offer access to online services through multiple sportsbook platforms, while three states and the District of Columbia confine online betting to just one digital betting service. COVID-19 was a major impetus for the rapid growth of online gambling. The ease, convenience, and safety of wagering from home or on mobile devices were particularly attractive during the height of the pandemic through most of 2020 and 2021. By 2023, 86% of sports wagers in the U.S. were placed online (6).
Source: Conor Mulheir, DraftKings overtakes FanDuel as US online sports betting. NEXT.io, October 19, 2023
Four major sportsbooks dominate the online betting market in the U.S. Nearly 83% of all online bets are placed with DraftKings, FanDuel, BetGM and Caesars. As shown in Figure 2, the two preeminent fantasy sports and sports betting companies, DraftKings and FanDuel, hold the largest shares at 31% and 30%, respectively (7). FanDuel overtook the perennial dominant, but recently sliding, DraftKings for the first time at the end of the 3 rd quarter in 2023. In 2022, FanDuel spent more than $1 billion on marketing and promotions (8). BetMGM’s market share dipped slightly to just over 15% at end of 2023, while Caesar’s maintained a smaller but stable 6% share.
“I haven’t seen an Online sports betting ad in almost 7 minutes. Am I Dead?”
– Conan O’Brien, 2022 Tweet
Online betting is projected to climb with nearly 37 million Americans – 14% of U.S. adults – expected to bet online by 2025(9). The ubiquity of smartphones and apps allowing easy access to lotteries, weekly jackpots, casino games, poker, and live sports wagering, including horseracing, have contributed to mobile betting’s soaring popularity. Smartphone use is at an all-time high in the U.S. with 85% of Americans using cellphones as their primary means to communicate and stay connected (10).
With sports betting revenues growing so rapidly, North American professional sports leagues have become prominent stakeholders. The Big Four North American professional sports leagues, which battled legalizing sports betting “as an existential threat,” are now its greatest beneficiary.
“Sports have made a stunning reversal on the collective stance toward gambling. What once was cast, publicly anyway, as a great taboo threatening the integrity of games… is now not merely accepted behavior, but a cornerstone of growth strategy.”
– John Wertheim, Sports Illustrated
In April 2021, the NFL signed its’ first-ever league-wide sports gambling deal reputed to pay the league “just shy of $1 billion” (11). The 5-year multiparty agreement expands Caesars Entertainment as the league’s Official Casino Sponsor and adds DraftKings and FanDuel as Official Sports Betting partners. In announcing the deal, the NFL stated, “… all three partners will have the exclusive ability to leverage NFL marks within the sports betting category and activate around retail and online sports betting. They will also engage with fan through NFL-themed “free-to-play games” (12). The NFL also recently expanded its gambling presence globally, naming 888sport its official betting partner in the United Kingdom and Ireland and BetCris its partner in Latin America (13)
Leagues are also creating new revenue streams through partnerships with data distribution companies, like Genius Sports and Sportradar, to sell official game information and video to casinos and sportsbooks. The National Basketball Association signed a $1 billion, 8-year contract with Sportradar starting with 2023/24 season, covering the NBA, WNBA and G League. The company will serve as the exclusive provider of NBA betting data worldwide. The NBA receives a three percent equity share of Sportradar for the duration of the contract.
The NHL’s partnership with Sportradar is estimated at $250 million over 10 years (14). On behalf of the NHL, Sportradar gathers league data and distributes it to clients like FanDuel and MGM Entertainment. The data includes basic statistical information like goals and assists and advanced statistics like slapshot velocity and skater speed. The dynamic data is used both to enhance game telecasts and engage bettors. “It’s all part of a league-wide push to give teams, fans, and betting houses more information about its games,” according to one analyst (15).
The following are the current betting partners of the major North American professional sports leagues:
Beyond the financial benefits, leagues and teams have found that sports betting deepens fan
engagement. As shown below, legalized gambling will likely benefit all sports ecosystem stakeholders as it changes fans’ viewing behavior (16). Not only does betting on game outcomes increase media viewership, but the practice also increases viewing intensity levels. North America’s NBA allows fans to stream the fourth quarter of a game for $1.99. The opportunity appeals to fans with limited time and is particularly attractive to gamblers interested in final outcomes.
Clearly, sports betting in the United States is changing how fans engage in professional sports.
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