Sports betting ads blitz Ariz. market
‘Free’ offers dangled for new customers
“Double your money if Arizona or Tennessee scores a point,” one advertisement proclaims. “Get up to $5,000 risk free on your first bet,” another promises.
If you hadn’t noticed, there are a lot of ads for sports betting in Arizona these days.
The betting companies are inundating the state with television, radio and online promos, and with hundreds of millions in revenue from gamblers at stake, it’s not likely to let up anytime soon.
The sportsbooks also are pouring on generous “free bet” offers of $100 or more for new customers who create an account and start betting.
While it sounds too good to be true, the sportsbooks love the promos because they get new customers comfortable with placing bets on their phones, and the companies can deduct the free bets from their tax liability.
So they want to tell you about it. Everywhere they can.
Arizonans are estimated to wager a few billion dollars a year on sports, nearly all of it without ever stepping foot in an actual sportsbook, thanks to legislation enacted this year. Betting began Thursday.
That’s got legal sportsbooks licensed to do business here spending millions on advertising to let Arizonans know they exist and, hopefully, convincing them to download their app rather than a rival’s.
“From my perspective, they are all spending as much money in media as they can to get the attention because they all are just going crazy for accounts,” said Greg Fisher, principal of Fisher PHX, an advertising design firm that works for several large clients, including sports teams. “They are willing to do anything. I believe it is an account grab right now.”
Fisher said the spending isn’t likely to slow down.
Most of the advertising saturating the state now is from five or so big players. The other 13 license holders are likely to get in the game eventually. Some of the remaining Native American tribes and sports teams that got licenses have yet to launch mobile sportsbooks or even announce their sportsbook partners.
$30M estimated spent in 6 weeks
Tim Riester, founder and CEO of the Riester advertising and marketing firm, has tracked the unprecedented ad blitz and estimates sportsbooks have spent $30 million in the Phoenix market in the past six weeks.
“It’s quite unprecedented to have this level of spending in the market in a nonpolitical year,” Riester said. “Your readers have felt it. You can’t watch a television break without seeing an ad for a sportsbook.”
The advertising so far has essentially come from sportsbooks aligned with professional sports teams. Riester said he anticipates the betting sites affiliated with tribal casinos don’t need to advertise as much because they already have databases of potential customers from the casinos.
The advertising began in July, jumped in August and jumped again the first five days of September.
Already, prices for television advertising in the local market have risen 30% to 40% because of the competition for advertising time, he said.
And the sportsbooks already have placed ads through December, with nearly half the advertising time for NFL games booked by gambling sites, he said.
That’s bringing lots of new money into the Phoenix market but also pushing some smaller, non-gambling advertisers off the airwaves for the time being.
“You have to rethink how you are going to do a campaign,” Riester said. “When the costs get this high we have to think of different ways to help the client without spending too much money.”
For a non-election year, television also is seeing more advertising than usual from political action groups, especially on cable networks like CNN and Fox News, he said, which puts more upward pressure on ad prices.
Sports teams benefit in may ways
The companies wouldn’t sink so much money into advertising if they didn’t expect it to pay off.
Estimates for how much Arizonans will gamble annually reach into the billions. Gamblers win some and lose some, but with a house edge built into the odds offered by sportsbooks, the estimates are that the companies operating in Arizona will generate more than $200 million annually in revenue from sports betting.
How that money is split between the tribes and sports franchises and the sportsbooks they partner with is not widely disclosed, though it’s likely a large cut goes to the sportsbooks because they handle all the operations.
“Certainly the Arizona sports teams able to acquire licenses are in a very good position. This is certainly the envy of a lot of other teams throughout the country,” said Ahron Cohen, former Arizona Coyotes president and CEO and a venture partner with the ADvantage Sports Tech Fund.
First, the sportsbooks likely are writing sponsorship-level checks to partner with the teams for a license, he said.
“These can come close to naming rights-type numbers,” he said, adding that teams likely can also negotiate revenue sharing if revenue is strong. “Every deal is unique.”
But the teams and gambling companies get more.
For example, in its deal with the Arizona Diamondbacks baseball team, Caesars Entertainment not only gets to run an in-person and mobile sportsbook , but gets access to the database of Diamondbacks customers. And the team gets to advertise tickets and other events to people in Caesars’ database, he said.
“And if you establish a brick-andmortar site, you are activating people to that site every night of the year, not just game nights,” he said. “The hope here from a sports industry standpoint is that this does for all sports what fantasy football has done for the NFL. What I mean by that is taking novice or casual fans and increasing their affinity for that sport.”
The sportsbooks help the sports franchises even if the team on the field is having an off year, Cohen said, thanks to proposition bets that involve wagering on particular events in a matchup, not just who wins.