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Sports Betting Market Analysis

Delivered September 17th, 2019. Contributors: akshitha, Michael F., Nehil S. and

Research Outline: Sports Betting Market Analysis
Part
01
of four
Part
01

Sports Betting Market: CAC

The customer acquisition costs for FanDuel and 32Red are $68 and $245.7, respectively. Below is a deep dive into our relevant findings, as well as our research strategy to explain why the requested information could not be obtained.

RELEVANT INSIGHTS ON CUSTOMER ACQUISITION COST FOR THE SPORTS BETTING MARKET

  • FanDuel is a sports betting company, and its customer acquisition cost is $68 with $20 million TV ad spend.
  • In the United States, the customer acquisition cost for an online casino player is more than $500.
  • In 2015, 32Red customer acquisition cost was £197 ($245.7).
  • In 2018, the customer acquisition cost of William Hill increased by 10% due to an increase in online marketing spend by 14% to £138.7 million.

ADVERTISING SPEND

  • In 2019, it is estimated that in the United States, ad spend in the sports betting market will reach $7 billion.
  • According to Gambling Sites, sports betting is the most popular type of gambling.
  • Gambling ad spend was $253.2 million in Australia in 2017.
  • In Europe, the different modes of gambling advertising spending include:
  • The marketing expense for 888 holdings, a top sporting betting company, was $155 million for FY 2018.

ADDITIONAL INSIGHTS

  • The top 10 sports betting companies across the globe include 888 Holdings, GVC Holdings, Kindred Group, Paddy Power Betfair, William Hill, Bet365, Stars Group, Draft Kings, Betsson, and BetAmerica.
  • The Asia Pacific region accounts for 47% of the world’s sports wagers.
  • Of all sports, soccer has the highest betting volume.
  • In the US, 50% of the population claimed that there were involved in sports betting at least once.
  • The global sports betting market size was around $104.31 billion in 2017 and is anticipated to reach $155.49 billion by 2024, with a CAGR of 8.83%.

RESEARCH STRATEGY:

To provide the average customer acquisition cost for a sports betting company, we first scoured through global sports betting market reports and other articles relevant to CAC across various websites such as PR Newswire, GlobeNewswire, Mordor Intelligence, GlobalData, Markets and Markets, Forbes, DemandJump, and others. This search yielded information on market size, CAGR, and the CAC of other industries but nothing specific to sports betting to derive further.

Next, we took different approach and tried looking for the key players of the sports betting industry such as 888 Holdings, GVC Holdings, Kindred Group, Paddy Power Betfair, William Hill, Bet365, Stars Group, Draft Kings, Betsson, and BetAmerica with an aim of identifying the customer acquisition costs for the different companies and then calculating the average to arrive at the customer acquisition cost for a sports betting company but most of the information is limited to marketing expenses. There is no specific information on CAC or the total number of customers to calculate the average CAC.
Further, we tried looking for information on the customer acquisition cost for a sports betting company in various geographies with a motto of calculating the average customer acquisition cost for a sports betting company in general in websites such as Responsible Gambling, Online Gambling, Chalkline Sports, Sports Betting Dime, etc. This strategy did not yield anything specific to customer acquisition cost for a sports betting company, geography wise.

Later, we searched for the information on the customer acquisition cost for a sports betting company by sports types such as Football, Casino, Cricket, Poker, etc. in websites such as ESPN, Opta Sports, FanDuel, Oaklins, Betrader, etc. We wanted to calculate the average customer acquisition cost for a sports betting company with the ratio of the market share of sports betting by sport, but we could not locate any sport-specific CAC or market share to derive further as most of the information is on ports betting companies with different sports betting.
As a last resort, we expanded the scope of our research and tried looking for information on customer acquisition cost for a sports betting company beyond standard timeline of 24 months in websites such as NextBigWhat, GodzFortune, The Motley Fool, Morning Star, Sharecast, Technavio, and others with an aim of calculating current customer acquisition costs for a sports betting company by calculating the CAGR. We could only locate minimal insights on CAC for some companies which are not suitable to calculate current customer acquisition cost for a sports betting company with a global scope.

As all the above strategies failed to derive at customer acquisition cost for a sports betting company, we have concluded that the information is not available and there's limited data to triangulate any further.
Part
02
of four
Part
02

US Sports Betting Market: ARPU and CLV

The estimated US legal and regulated sports betting industry average annual revenue per user (ARPU) is $13.00, while a small portion of the industry averages $21.00 in customer lifetime value (CLV). At least two sports betting companies claim that their retention rate for 30 days is 50% or more.

ANNUAL REVENUE PER USER (ARPU)

  • The estimated ARPU is $13.00 based on the annual legal and regulated sports betting industry revenue and the number of core bettors in 2018.

CUSTOMER LIFETIME VALUE (CLV)

  •  Stephen Murphy, Boom Fantasy CEO and online gaming consultant, estimated the customer lifetime values of sports betting companies including DraftKings/ Fanduel, Fantasy Draft, PaddyPower and Boom Fantasy.
    • DraftKings/Fanduel estimated CLV: $45 
    • Fantasy Draft estimated CLV: $10 
    • Draft (PaddyPower) estimated CLV: $10 
    • Boom Fantasy estimated CLV: $19 

RETENTION RATE

  • DraftKings, with its innovative approach to the sports betting industry, claims a 90% retention rate.
  •  SportAd New Jersey reported their retention rates for 30, 60 and 90 days are 50%, 35%, and 28%, respectively.

HELPFUL FINDINGS

Gross Gaming Revenue

  • The American Gaming Association (AGA) defined the gross gaming revenue (GGR) as the amount retained by the sports betting operation after payment of prizes.
  • In Nevada, sports betting shows GGR of approximately $42 per adult.
  • In Delaware, sports betting shows GGR of approximately $11 per adult.

2018 Annual Sports Betting Revenue

  •  $429,096,867 is the 2018 revenue of the legal and regulated sports betting industry in US.
  •  $150 billion is the estimated annual wagering handle in the black market.

Sports Betting Consumers

  • In a 2018 survey among 234.6 million people of ages 21 and above, 39% represent the sports betting opportunity consisted of core bettors, casual betters, potential bettors, and interested individuals.
  •  14% (32.8 million) were core bettors or individuals who have placed sports bet at a casino, online or with a bookie in the past 12 months.
  •  8% (18.8 million) were casual bettors or individuals who haven't placed traditional sports bets in past 12 months, but have placed a bet via family/friends, pool, or fantasy.
  •  12% (28.2 million) were potential bettors or individuals who haven't placed any bets in the past 12 months, but would do so in the future.

RESEARCH STRATEGY

We began our research by looking into US organizations websites dedicated to gaming and sports betting such as the American Gaming Association, UNLV Gaming Research. We also searched gaming industry websites such as PlayUSA and EGR. We found some useful information such as the annual revenue of the US legal and regulated sports betting industry, gross gaming revenue (GGR), and sports betting consumers. Although we did not find exact figure of the national average annual revenue per user (ARPU), we were able to triangulate the data by dividing the total US sports betting annual revenue by the number of core bettors. We were able to affirm our data triangulation with confidence when we saw that the calculated ARPU was in the same range of the GGR.

Similarly, the exact figures of the national average Customer Lifetime Value (CLV) and retention rate were not available in the initial websites we searched. So, we looked at market reports and sports betting companies' annual reports, and found a limited number of sports betting companies with estimated CLV and retention rate. There were four companies with disclosed CLV's that averaged to $21, and two companies with retention rates that averaged to 70%. However, since the averages we calculated only represented a minuscule portion of the total population of sport betting companies, we cannot strongly assert that these will be the sports betting industry average CLV and retention rate.
Part
03
of four
Part
03

Sports Betting Market: CAC Examples

After an exhaustive search through credible sources, it appears that details on the customer acquisition cost for a sports publishing company similar to BILD is unavailable in the public domain.

KEY RELEVANT INSIGHTS - SPORTS BETTING MARKET: CAC EXAMPLES

BILD
MEYER & MEYER THE SPORTS PUBLISHER
ZDF SPORT
  • ZDF Sport has 2.90 daily page views per visitor, while visitors spend an average of 3 minutes and 08 seconds (3:08)on the site each day. ZDF Sport also has and a 2% bounce rate.

ADDITIONAL INSIGHTS

CUSTOMER ACQUISITION COST:
  • As per Propeller, CACs benchmarked across a various industries are as follows; Travel: $7, Retail: $10, Consumer Goods: $22, Manufacturing: $83, Transportation: $98, Marketing Agency: $141, Financial: $175, Technology (Hardware): $182, Real Estate: $213, Banking/Insurance: $303, Telecom: $315, and Technology (Software): $395.
  • The median costs per acquisition within Google Paid Search Campaigns in 2018 across all industries was $49.86.
  • The median costs per acquisition within the Google Display Network (GDN) in 2018 across all industries was $75.51.
  • An ideal CAC can be calculated by correlating it to Customer Lifetime Value, or LTV. A quintessential LTV to CAC ratio is about 3:1.
GAMBLING AND BETTING MARKET:
  • According to Regulus Partners, since 2014, the overall spending by gambling entities on marketing has risen by around 56%, and it is currently estimated at £1.5 billion.
  • Direct online internet marketing spending in 2017 amounted to approximately £747 million, or about 48% of the overall gambling marketing cost.
  • Advertising via marketing affiliates such as publications, tipsters, and websites that garner commission for producing fresh business for the gambling entities cost £301 million, or 19% of the total gambling marketing spend that year.
  • TV gambling advertising cost about £234 million in 2017, which was merely 15% of the year's total gambling marketing spend.
  • Social media advertising costs £149 million, or only 10% of 2017's total gambling marketing spend.
  • More than two-thirds (80%) of gambling marketing spend, as of 2017, is online.

Research Strategy:

Our research began by searching for existing data from the website, annual reports, and investor presentations of BILD, Meyer & Meyer The Sports Publisher, ZDF, Maeva Ediciones, Evo Publications, etc. We wanted to see if they provided information on the customer acquisition cost of their company. However, none of them published such information. Moreover, many did not release their annual report, as most are private businesses. Their focus centered on the news, the work they perform, advertising, etc.

Afterward, we attempted to conduct a triangulation. To do this, we searched for the cost of sales and marketing (divided), and the number of new customers acquired to calculate the customer acquisition cost using the formula mentioned by Hubspot. We searched through media publications, third party reports, the annual reports of the companies, Statista, Alexa, and Thalamus, among others, but no company published the details needed for calculation. We were able to locate BILD’s volume of print copies, the number of copies sold, along with the unique users. However, there was no information on the cost of sales and marketing or the advertising spend. Hence, this strategy also failed to yield results.

Finally, we tried to triangulate the information using alternate data points. For this, we searched for sports publishing or publishing industry customer acquisition cost from industry reports like European Gaming, Demand Jump, Hub Spot, Entrepreneur, and Chatter Buzz, among others, but these also did not provide relevant data. We wanted to check the average customer acquisition cost for sports publishing or the publishing industry, and use it as a base to provide similar cost for the companies in Europe using their market share. Though the reports provided the average customer acquisition cost for various industries, specifications regarding the sports publishing or publishing industry was unavailable. Hence, this strategy was ineffective.

Due to the lack of information, we were unable to provide data regarding the customer acquisition cost for a sports publishing company similar to BILD, and details on BILD was unavailable. A probable reason could be the focus on the revenue generation, copies sold, and digital reach of the company. Another possibility is that the sports publishing sector is a niche market, and concentration is on the primary industries like travel, retail, consumer goods, manufacturing, technology, banking/insurance, among others.

Part
04
of four
Part
04

EU Sports Betting Market: ARPU and CLV

Information on annual revenue per user (ARPU), customer lifetime value (CLV) and retention rates for 1 to 30 days of the EU sports betting market is not available, and there is limited or unavailability of information to triangulate further. We have, however, provided some useful findings below.

RELEVANT INSIGHTS

ANNUAL REVENUE PER USER (ARPU)
  •  In 2018, William Hill ARPU in the UK was £202 and ARPU at the international level is £256 .
  • In 2018, the total revenue of the Kindered group was £907.6 million, and active customers were 3.1 million. The total revenue by the number of subscribers gives ARPU of a sports betting company, and so, ARPU of Kindered group is £292.7, which is calculated as (907.6 /3.1) ($363.3).
CUSTOMER LIFETIME VALUE (CLV) AND RETENTION RATES
  • William Hill, Europe's leading online betting company, adopted Kenshoo’s automated real-time Facebook bidding solution, which increased the customer lifetime value for the company.
  •  In 2016, GVC Holdings collaborated with Optimove, a leading provider of customer marketing cloud, which was known for its increased customer lifetime value by 25%.
  •  BetFred, a leading UK online sports betting company, is popular for its high retention rate.
  • William Hill's in the UK has 81% of customer retention rate.
ADDITIONAL INSIGHTS

RESEARCH STRATEGY

The research team started by trying to look for information on annual Revenue per user (ARPU), customer lifetime value (CLV) and retention rates for 1 to 30 days of the EU sports betting market in EU sports betting market reports and other articles relevant to ARPU, CLV and retention rate across various websites such as PR Newswire, European Gaming and Betting Association, Global Newswire, among others. We could locate information on the market size of online sports betting in Europe and global stats but not specific to annual revenue per user (ARPU), customer lifetime value (CLV), and retention rates to derive further.

Next, we took a different approach and tried to look for key players of Europe sport betting industry such as GVC Holdings (UK), Kindred Group (Malta), Paddy Power Betfair (Ireland and UK), William Hill (UK), Mr Green, 32Red, NetBet, Redbet, Unibet, Tipbet, Novibet, among others. We aimed to garner apropos of annual revenue per user (ARPU), customer lifetime value (CLV), and retention rates and then calculating the average further to derive at figures on EU sports betting market. However, most of the information is limited to revenue generated and very few companies such as William hill quoted details on ARPU, but nothing specific to active customers to derive at annual revenue per user (ARPU), customer lifetime value (CLV) and retention rates of EU sports betting market.

Further, we tried looking for information on annual revenue per user (ARPU), customer lifetime value (CLV) and retention rates for EU sports betting market in various EU countries with a motto of calculating the average further and could locate general insights on sports betting for various countries such as Germany, UK, France, Spain, among others. We explored websites such as Transparent Bets, Responsible Gambling, Online Gambling, among others, but nothing specific to annual revenue per user (ARPU), customer lifetime value (CLV), and retention rates for 1 to 30 days of the EU sports betting market was found.

Later, we tried looking for information on annual revenue per user (ARPU), customer lifetime value (CLV) and retention rates for 1 to 30 days of the EU sports betting market by sports types such as football, casino, tennis, among others, in websites such as ESPN, FanDuel, Oaklins, and 32red. We intended to calculate the average annual revenue per user (ARPU), customer lifetime value (CLV), and retention rates with the ratio of market share of sports betting by sport but could not locate any sport-specific annual revenue per user (ARPU), customer lifetime value (CLV) and retention rates or market share to derive further as most of the information is on sports betting companies with different sport bettings.

As a last resort, we expanded the scope of the research and tried looking for information on annual revenue per user (ARPU), customer lifetime value (CLV), and retention rates for 1 to 30 days of the EU sports betting market beyond the standard timeline of 24 months in websites such as PRWeb, Next Big What, Godz Fortune, among others with a motto of calculating current ARPU, CLV and retention rates by Calculating CAGR from historical data. We could locate very limited insights on ARPU for some companies, which are not suitable to calculate current customer acquisition cost for a sports betting company with global scope.



Did this report spark your curiosity?

Sources
Sources
From Part 01

Top 10 Sports Betting Companies in the World 2019 | Online Gambling Market - Technavio

blog.technavio.com
Publication Year: 2019

How FanDuel and DraftKings Work

investopedia.com
Publication Year: 2019
Quotes
  • " FanDuel’s TV advertisement spending at about $20 million, resulting in an average costumer–acquisition cost of $68, according to Forbes. Despite the high acquisition cost, Krejcik predicts FanDuel makes $100 off each customer, per season."

Why US Sports Operators Should Acquire Sports Bettors Now

chalklinesports.com
Publication Year: 2019
Quotes
  • "Currently, the cost of acquiring an online casino player can exceed $500 in regulated States. "
c

888 holdings

corporate.888.com
Publication Year: 2018

Is 32Red plc A Better Buy Than GVC Holdings plc, Bwin.party Digital Entertainment plc & Betfair Group Ltd?

fool.co.uk
Publication Year: 2015
Quotes
  • "32Red spent more money to attract new casino customers this year, as customer acquisition costs rose £17 per person on last year, to £197."

William Hill to increase marketing spend again in 2018 - AffiliateINSIDER

affiliateinsider.com
Publication Year: 2018
Quotes
  • "“Cost of customer acquisition increased 10% as the increase in new customers lags the increase in marketing spend. "
  • "we increased our online marketing spend by 14% to £138.7 million, and will increase that again in 2018, a World Cup year."

U.S. casinos pledge responsible marketing rules for sports betting

reuters.com
Publication Year: 2019
Quotes
  • "Sports betting could drive $7 billion of incremental advertising spending in 2019"

Gambling advertising

responsiblegambling.vic.gov.au
Publication Year: 2018
Quotes
  • "the gambling industry spent $253.2 million on advertising in Australia in 2017, up from $89.7 million in 2011. "

Gambling companies spend £1.2 billion marketing online, five times more than on television ads

europeangaming.eu
Publication Year: 2018
Quotes
  • "• Direct online internet marketing costs – £747m, almost half (48%) of total gambling marketing spend"
  • " TV gambling advertising – £234m, just 15% of total gambling marketing spend • Social media – £149m, more than tripling over three years, and 10% of total gambling marketing spend • Sponsorship – £60m, double the amount spent in 2014 (£30m)."
  • "80% of all gambling marketing spend is now online"

Sports Betting vs Other Forms of Gambling - Major Differences

gamblingsites.com
Publication Year: 2019
Quotes
  • "Sports betting is a VERY popular form of gambling for a variety of reasons."

The Size and Increase of the Global Sports Betting Market

sportsbettingdime.com
Publication Year: 2019
Quotes
  • " It’s estimated that residents falling in the APAC region are responsible for 47% of the world’s sports wagers."
  • "According to a recent Statista survey, over 50% of US citizens admitted to placing a bet on a sporting event at least once in their life"
  • "Football (the European kind) has, by far, the greatest betting volume, closely followed by American football. The other big three North American leagues (MLB, NBA, NHL) receive a significant amount of betting volume, too."

Global Sports Betting Market Will Reach USD 155.49 Billion By 2024: Zion Market Research

globenewswire.com
Publication Year: 2018

FanDuel: Daily Fantasy Football, MLB, NBA, NHL Leagues for cash | FanDuel

fanduel.com
Publication Year: 2019

USD per 1 GBP - Past 24 hrs

xe.com
Publication Year: 2019

Customer Acquisition Costs by Industry: What’s a Good CAC?

demandjump.com
Publication Year: 2019
From Part 02
a

ECONOMIC IMPACT OF LEGALIZED SPORTS BETTING

americangaming.org
Publication Year: 2017
Quotes
  • "Gaming revenue: Also referred to as gross gaming revenue, net win, or GGR, refers to the amount retained by the sports betting operation after payment of prizes. Unless otherwise noted, gaming revenue or GGR in this report refers to revenue specifically generated by sports betting. "
  • "The research found approximately 28% of US adults currently bet on sports, wagering an average of $1,554 over the past 12 months. Applying these values to the total US adult population yields an estimate of $107 billion of sports betting handle. "
  • "Additionally, EY noted survey respondents indicated that they would significantly increase their sports betting activity if sports betting was more widely legalized. "
a

Consumer Movement Toward Sports Betting

americangaming.org
Publication Year: 2018
g

UNITED STATES SPORTS BETTING

gaming.unlv.edu
Publication Year: 2019
a

State of the States 2019: TheAGA Survey of the Commercial Casino Industry

americangaming.org
Publication Year: 2019

DraftKings and FanDuel – Lies, damned lies, and statistics

egr.global
Publication Year: 2017

MetroBet interview with DraftKings Sportsbook digital head Jamie Shea

metro.us
Publication Year: 2019

Golden Nugget And FastPick Sports Game Dominate EGR North America Awards

playusa.com
Publication Year: 2018
From Part 03

bild.de Competitive Analysis, Marketing Mix and Traffic - Alexa

alexa.com
Publication Year: 2019
t

Advertising Vendor Profile - BILD

thalamus.co
Publication Year: 2019

BILD Zeitung: circulation in Germany 2019 | Statista

statista.com
Publication Year: 2019
d

Sceenshots for Sports Betting Market: CAC Examples

docs.google.com
Publication Year: 2019
m

Media Impact - BILD

mediaimpact.de
Publication Year: 2018

Topic: Bild Zeitung in Germany

statista.com
Publication Year: 2019

About us - Meyer and Meyer Sport UK

meyer-meyer-sport.co.uk
Publication Year: 2019

ZDF sport

zdf.de
Publication Year: 2019

zdf.de Competitive Analysis, Marketing Mix and Traffic - Alexa

alexa.com
Publication Year: 2019

Sports Publishers' Directory - List of publishing companies that publish Sports books, ebooks, magazines, newspapers... | PublishersGlobal.com

publishersglobal.com
Publication Year: 2019

Gambling companies spend £1.2 billion marketing online, five times more than on television ads

europeangaming.eu
Publication Year: 2018

Customer Acquisition Costs by Industry: What’s a Good CAC?

demandjump.com
Publication Year: 2019

The Ultimate Guide to Calculating, Understanding, and Improving CAC in 2019

blog.hubspot.com
Publication Year: 2018
From Part 04
a

William Hill ARPU

azarplus.com
Publication Year: 2019

Sports Betting In Europe - Best European Betting Sites For 2019

sportsbetting777.com
Publication Year: 2019
Quotes
  • "Of course, the biggest and most popular option is football and the market is full of numerous sign-up bonuses from the best football betting sites, especially due to the huge number of games and the popularity of the sport."
  • "Tennis is second in most places, except countries from Eastern Europe, where basketball is more popular. Also, horse racing betting is mostly popular in the UK and not much outside it, while ice hockey is only watched and played seriously in a few countries (Nordics, Czech Republic, Russia). "

How to Calculate the Average Revenue Per Unit -- The Motley Fool

fool.com
Publication Year: 2018
Quotes
  • "The formula for calculating ARPU is pretty straightforward. Simply divide the total revenue by the number of subscribers"
m

Kindered group

mb.cision.com
Publication Year: 2018

William Hill Increases User Volumes by 72% While Cutting CPA by 40% through Kenshoo Apps

kenshoo.com
Publication Year: 2019

Sports Betting Germany – A Very Profitable Market Yet to be regulated

transparentbets.com
Publication Year: 2019

GVC Holdings Selects Optimove as its Enterprise Customer Marketing Ven

prweb.com
Publication Year: 2016
Quotes
  • "Optimove has been proven to help its clients increase customer spend by an average of 17%, reduce churn by 11% and increase customer lifetime value by 25%."

Top 10 Sports Betting Companies in the World 2019 | Online Gambling Market - Technavio

blog.technavio.com
Publication Year: 2019

Top 10 Bookmaker Affiliate Programs To Bet Your Financial Future On

onemorecupof-coffee.com
Publication Year: 2019
Quotes
  • "BetFred is touted as being one of the largest private betting companies in the world. The company has high retention rates and converts well, with quite a few betting shops in the United Kingdom. BetFred has a strong focus on sporting events."

How Online Casinos are Acquiring and Retaining Customers | PCsteps.com

pcsteps.com
Publication Year: 2018
w

Title

webcache.googleusercontent.com
Publication Year: 2019
Quotes
  • "Monique Pollard (Citi): Three questions from me, if I may. Following on from the question on UK actives, in particular when I look at the UK retention rate of your existing customers, up at 81% which seems really high, I am just wanting to understand what measures specifically you put in place to help that."
  • "In the UK, new accounts are up 10%, actives up 25%, benefiting from the new accounts plus improved retention, a lower ARPU due to the mass market nature of the new accounts, plus a reduced CPA due to the increased marketing efficiency which has been a focus of our transformation programme."

Global Sports Betting Market Will Reach USD 155.49 Billion By 2024: Zion Market Research

globenewswire.com
Publication Year: 2018

EUR per 1 USD - Past 24 hrs

xe.com
Publication Year: 2019

EGBA-EU Market

egba.eu
Publication Year: 2019
Quotes
  • "The economic size (or gross profit) of the European online sector is expected to rise from €19.6 billion in 2017 to €24.7 billion in 2020."
  • "In 2017, sports betting was the most popular form of online gambling (40.3% of gross gambling win),"

Best Online Casino - 150% Bonus up to £150 - Join 32Red & Play Now

32red.com
Publication Year: 2019