Published on: September 16, 2022, 01:42 am.
Last update: September 16, 2022, 01:42.
NFL fans watching games on TV this year may notice that PointsBet and WynnBET are absent from the sports betting advertiser competition, as both companies declined to renew their “approved sports betting operator” status with the league for the 2022 season.
Last year, PointsBet and WynnBET joined rivals BetMGM, Caesars Sportsbook, DraftKings, FanDuel and FOX Bet as sportsbook operators with the NFL stamp of approval. However, this status did not come cheap. The gambling companies each paid $4 million just to be an NFL-approved sportsbook operator, and that didn’t include their advertising expenses, according to Eilers & Krejcik in the latest edition of its bi-weekly. EKG line report.
In addition, the NFL restricted the types of bets that gambling companies could promote in their advertisements.
For example, the NFL does not allow the trading of in-game odds at halftime, even if it is dressed in percentages rather than odds. The league suggested to partners this could change next year. But for now, PointsBet and WynnBET felt the money would be better spent elsewhere,” noted Eilers & Krejcik.
The news comes as both PointsBet and WynnBET face company-specific headwinds, and both trail the likes of BetMGM, DraftKings and FanDuel in terms of market share.
PointsBet, WynnBET could signal more reason
WynnBET specifically, the operator’s decision to cut NFL ad spending isn’t surprising, as executives at Wynn Resorts (NASDAQ:WYNN) have previously said they don’t want to engage in a spending war with rivals simply to acquire customers for sports betting.
Overall, the departure of PointsBet and WynnBET from the NFL sportsbook operator could be another sign that gambling companies are looking to be more pragmatic about their spending and focus more heavily on making their betting divisions online profitable.
“PointsBet and WynnBET’s decisions to reduce NFL-related spending reflect the continued rationalization in the heretofore hyper-irrational US OSB marketing space,” added Eilers & Krejcik.
Some analysts believe that when it comes to comparing marketing and promotional spend, all bets could be off when Fanatics enters the arena, as that company has the resources to quickly build up market share. This could force some of the operators mentioned above to resume expensive spending habits.
Shares of DraftKings ( NASDAQ:DKNG ) are up 57.15% in the current quarter — a sign that the company is being rewarded by the financial markets for its recent caution.
This does not mean that the operator foregoes marketing expenses. Its partnership with Thursday Night Football could cost between $15 million and $20 million annually, and that’s on top of the $65 million a year the company spends to be one of the NFL’s three “official betting partners” , according to Eilers & Krejcik.
“Sponsoring a digital platform is more attractive than linear TV in our view, as customers using Amazon Prime are likely to be tech-savvy and e-commerce professionals,” the research firm said.