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How Much Do New York Sportsbooks Spend On Advertising?
Next time you’re watching TV, I want you to take note of just how many sportsbook ads you see. In just the last few months alone, the number of sports betting ads on TV, Radio, and the Internet has been astronomical–especially in newer market states like New York.
But if you thought the sports betting ads plastered all over New York meant the industry was raking in the dough, then you might want to think again.
Since launching in New York on January 8th, sportsbooks have actually shown no profits–and have likely lost money–since launch.
It makes a bit of sense though, right? Invest heavily in advertisements and promos early on, that way you can build a solid fanbase and profit from there in the future. While it sounds all nice and dandy, the 51% tax on bookmaker's gross revenue is making things even harder–and at a projected advertising cost of $100-$150 per new customer, some sportsbooks may actually be bleeding money right now.
I wouldn’t fear too much if I was a sportsbook operator in New York, however. The advertising seems to have worked–more people have signed up for one of the several available sportsbooks in New York than ever expected.
Since online sports betting became legal in the state, somewhere between 1.5-2 million new accounts have been opened across all available sportsbooks in New York. State data all show that approximately $2.3 billion has been wagered on sports through February 13th.
So how much is spent on advertising?
It’s hard to tell, but an industry analyst for the New York Post has taken a look and made an educated guess.The analyst took a look at DraftKings in particular, who had raised around $47 million in New York state gross gaming revenue through February 13th.
The analyst concluded that DraftKings likely spends 150% of that revenue on promotions, based on what they’ve done in other states.
That ends in a net $50 million loss.
We’ll know more about this, with more concrete numbers, as time moves on–and be sure to check back with oddsseeker for all your sports betting news.