In a major shift for the US sports betting industry, ad spending fell 21% last year to $1.1 billion, marking the first decline since 2016, according to a Nielsen study commissioned by the American Gaming Association trade group.
The report highlights a notable decrease in the prevalence of betting commercials that once dominated sports television, as operators grapple with the imperative to stem losses within the sector.
Spending in the sector surged to about $1.4 billion in 2022 from a modest $22.9 million five years earlier, reflecting the meteoric rise of sports betting in the United States following the Supreme Court’s decision in 2018 to expand its reach beyond Nevada.
With gambling opportunities now available in around 38 states, companies initially poured money into promoting their betting apps, particularly in newly opened markets. However, a strategic pivot became evident in the latter half of 2022, as investors exerted pressure for profitability.
The industry also faces other mounting challenges, including scandals and regulatory scrutiny aimed at curbing excessive marketing practices. Recent controversies include the lifetime ban imposed on NBA player Jontay Porter, who was accused by the league of compromising his performance to influence betting outcomes.
Congressman Paul Tonko, a Democrat from New York, has emerged as a prominent critic of the industry’s advertising tactics, introducing legislation last year to ban sports marketing across electronic mediums, including television, radio, and the internet. Tonko has advocated for other measures as well, such as prohibiting ads during games and curbing promotions that incentivize betting.
Television remains the primary arena for sports betting advertisers, commanding over half of total spending, as per the Nielsen data.
Despite the industry’s advertising pullback, the American Gaming Association underscores that sports betting constitutes less than 1% of national TV advertising, a fraction compared to sectors like fast food, alcohol, telecommunications, and pharmaceuticals.
Original article: https://www.yogonet.com/international/noticias/2024/05/03/72013-sports-betting-companies-slashed-ad-spending-by-21-in-2023-amid-industry-pressures
