NFL fans watching games on television this year may notice PointsBet and WynnBET are absent from the fray of sportsbook advertisers. Both companies declined to renew “approved sportsbook operators” status with the league for the 2022 season.
The sportsbook at Wynn Las Vegas. PointsBet and WynnBET are eliminating NFL ad spending. (Image: Vegas Advantage)
Last year, PointsBet and WynnBET joined rivals BetMGM, Caesars Sportsbook, DraftKings, FanDuel, and FOX Bet as the sportsbook operators with the NFL stamp of approval. However, that status didn’t come cheap. The gaming companies each shelled out $4 million just to be an approved NFL sportsbook operator, and that didn’t include their advertising expenditures, according to Eilers & Krejcik in the most recent edition of its bi-weekly EKG Line report.
On top of that, the NFL restricted the types of bets the gaming companies could promote in their ads.
For instance, the NFL does not allow marketing of in-play odds at half-time, even if dressed up as percentages rather than odds. The league has hinted to partners this could change next year. But for now, PointsBet and WynnBET felt that money was better spent elsewhere,” noted Eilers & Krejcik.
The news comes as both PointsBet and WynnBET are encountering company-specific headwinds. Both are trailing the likes of BetMGM, DraftKings, and FanDuel in terms of market share.
PointsBet, WynnBET Could Be Signaling
Specific to WynnBET, the operator’s decision to reduce NFL ad spending isn’t surprising, because executives at parent Wynn Resorts (NASDAQ:WYNN) previously said they didn’t want to engage in a spending war with rivals simply to acquire sports betting customers.
In aggregate, the departure of PointsBet and WynnBET from the NFL sportsbook operator party could be another sign gaming companies are looking to be more pragmatic about spending. They are focusing more intently on making their online betting divisions profitable.
“The decisions by PointsBet and WynnBET to trim NFL-associated spend reflects ongoing rationalization within the hitherto hyper irrational U.S. OSB marketing space,” added Eilers & Krejcik.
Some analysts believe that in terms of paring marketing and promotional spending, all bets could be off when Fanatics enters the arena. That’s because that company has the resources to rapidly accumulate market share. That could compel some of the aforementioned operators to resume costly spending habits.
DraftKings Spending
Shares of DraftKings (NASDAQ:DKNG) are higher by 57.15% in the current quarter — a sign the company is being rewarded by financial markets for newfound prudence.
That doesn’t mean the operator is forsaking marketing expenditures. Its partnership with Thursday Night Football could cost as much as $15 million to $20 million annually. That’s on top of the estimated $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, since customers using Amazon Prime are likely to be tech-savvy and pro e-commerce,” said the research firm.
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