How Much Do Sportsbooks Spend to Get Your Business?

Just like any other business, there is a marketing side to operating a sportsbook. Getting customers is the ultimate goal no matter what you are selling. In movie theaters, sporting events and live entertainment they call it “getting butts in seats”. The customer is king. Without them there is no business.

The main measurement sportsbooks use to decide if their marketing efforts are thriving are called “FTD’s”. This stands for “First Time Depositors”. Their entire marketing model is deciding how much is worth spending to secure one single first time depositing customer. At the highest levels it is believed that management signs off to spending between $200-$500 per new depositing players, or in other markets what is referred to as CPA (Cost Per Acquisition).

The way this money is spent varies. Here is a list of how the marketing budget is spent for sportsbooks looking to gain new customers:

1. Paid Media – If you have watched any sporting event in the last 5 years, you know that this is the #1 way they spend money. You cannot watch a game without being bombarded with dozens of sportsbook messages.
2. Affiliate Marketing – This is where a media platform decides to enter into an agreement with a sportsbook (or their media marketing company) to promote their brand. The affiliate marketer will usually make $100-$200 for every new active account generated.
3. SEO and Organic – You cannot run a business online without spending the proper amount of money optimizing your site, building content and inbound links. Sportsbooks each spend hundred of thousands to a few million dollars per year on SEO.
4. Bonus Offers – You’ve seen them everywhere by now. Sportsbooks will raise the amount of bonus and “free bets” when they feel it can help generate new players.
5. Friend Referral – If you have played at Fanduel, Hard Rock or BetMGM you no doubt have seen the offer to make money for yourself and any person you refer. Usually the offer is between $50-$100 for each of you.
6. Retention Programs – Rewards and VIP programs are meant to keep you engaged and from playing elsewhere. These will usually offer you more perks the more that you play.

Total Marketing Budget

Total marketing budgets vary from sportsbook to sportsbook of course and change from week to week and sport to sport. The heaviest push comes before the initial weeks of NFL football.  In 2022, there were five advertisers approved by the NFL: FanDuel, DraftKings, Caesars, BetMGM and FOX Bet. They spent a combined $24M on TV marketing just on week 1 alone. Fanduel outspent everyone on the list by at least a 2 to 1 ratio. From September 2021 to May 2022, all sportsbooks spent a combined $282M in total TV marketing in the U.S. alone. (source – igamingbusiness.com)

How Long Does it Take for a Sportsbook to Recover Cost of Producing One Player?

Flutter Entertainment is a company which manages and operates sportsbook brands in the United States. Their largest brand is Fanduel. According to their CEO Peter Jackson (not of Lord of the Rings fame), it takes about a year and a half to recoup the expense of obtaining one new active player. He said: “customer acquisition in new and existing states remains compelling, with payback periods of 18 months.”

With this logic, you can assume that a sportsbook generates up to $500 from each client on average a year and a half after they make their first deposit. This also factors in all of the players that only deposited and played one time and those who have won money from the sportsbook and are in the black. If they can keep a player active beyond the 18 month mark, it is safe to assume that this is when the customer starts to become profitable.

Scott Morris
SBA