Whether you are taking public transit, on social media, or simply looking up, advertising for sports betting websites has become an invasive reality in Toronto.
Online sports betting was greenlit back in April of this year. Those awaiting its arrival were eager to stockpile as many eggs as this golden goose was willing to lay. In just the past few months the goose provided, with reports showing that revenue from sports betting organizations was $162 Million in the first quarter of operations alone.
While the numbers have no doubt gone up between now and the initial report, one can’t help but wonder if advertising real estate will continue to be devoured by online sports betting organizations.
In essence, what is the advertising shelf-life of a product that isn’t a product?
“The product itself is different because it is an effort to get people to gamble online, so already, you’re dealing with something that is not tangible,” says David Soberman, the National Chair in Strategic Marketing at the Rotman School of Management at the University of Toronto.
Soberman has assessed the advertising blitz of online betting companies over the last several months and has observed how these organizations approach client acquisition while fending off the competition.
“What we know about these types of products is that there is an incredible ‘stickiness.’ In other words, once you’re done betting on a website (and if you like the way that it operates) you are highly unlikely to go to another,” says Soberman.
This comfort model is a major factor in how these online organizations attain client loyalty, Soberman adds.
“This ‘stickiness’ means that the marketing efforts to try and get people who are interested in the actual activity are amplified because the value of a customer is not what they bet in the first two or three months — it’s trying to get them to stay on with you for several years,” says Soberman.
The end result of this technique is a digital land grab, where every betting organization in play observes the landscape of potential customers and advertising space and pushes their advertising incentives in order to stake their claims.
As the race for online betting patrons continues, advertising of sports betting is something that is currently still working in the favour of these organizations’ pocketbooks.
However, even in the short amount of time that has passed between now and legalization, saturation has swallowed the market.
“People are getting absolutely suffocated by the amount of advertising for sports betting websites now. They’re appearing as the only thing that is really advertised, and one of the things people do when they start seeing too much advertising for something is they start tuning out and stop paying attention,” says Soberman.
This has resulted in a paradox for advertisers, a paradox that Soberman broke down into a simple formula.
“It may be privately optimal for an organization to run 15 ads, but if all of the other websites run 15 ads during the same sportscast, the marginal effectiveness of the advertising goes down.”
According to Soberman’s math, even if two competing sports betting companies are averaging a similar number of new clients per broadcast, the resulting tug-of-war renders the entire process moot.
“Their advertising cancels out, so the big question is, how many people are these companies actually bringing in?” adds Soberman.
When asked if he has seen saturation like this in his decades of marketing experience, Soberman replied with a forbearing “No,” remaining stunned at the rate at which these advertisers push into what is unmistakably an oversaturated market.
While the wild west of advertising for online sports betting continues to go unchecked, there are additional concerns about who can operate as a licenced booker. The Alcohol and Gambling Commission of Ontario (AGCO) recently announced that any operations functioning in the ‘grey market’ must become officially licenced or close by the end of October.
This will decongest the market by removing non-sanctioned bookmakers, however, these are not the entities that are on every billboard in the city.
The current big players licenced to operate in Ontario are BetMGM, Caesars, BetRivers, Bet 365, 888 Sport, Coolbet, Royal Panda and LeoVegas.
These are the names that have engulfed much of the city’s advertising margins and are just a slice of the 27 operators that have been granted licenses.
Any betting through these services has to be done in tandem with AGCO protocols, similar to lotteries or brick-and-mortar casinos.
While revenue acquired from sports betting organizations is being touted as a new kind of economic bandage by its supporters, the risk for the consumer has never been more significant.
“There’s no real limit to the amount that you can bet, so it’s no different than a casino. There’s an argument that this whole side of the business creates dangers, then you have the other side of the argument, which is ‘Caveat Emptor,’” says Soberman.
Caveat Emptor is a centuries-old principle that roughly translates to what we know today as ‘Buyer Beware.’ This school of thought is what the advertising boom is riding on. Even though there is the risk of both addiction and financial ruin for the consumer, the onus of responsibility still falls upon them.
This reveals an even larger concern — what even are the safeguards for those who are at risk?
Dr. Nigel Turner is a specialist in gambling studies at the Centre of Addiction and Mental Health (CAMH) in Toronto.
He has been closely monitoring the development of online sports betting across Ontario and how it specifically correlates to those who are at risk of addiction.
“People who have had a gambling problem in the past are particularly vulnerable, as they already have a weakness for gambling… So when this particularly vulnerable group sees these ads some of them break down and relapse,” Turner told The Hoser.
Like any gambling incentive, there is the false promise that the consumer will make money as a result of engaging with their product. According to Turner, this ends up feeding into the initial gambling high — the first hit isn’t the money you make — it’s the thrill of the prospect.
“Reward and positive reinforcement that you get as a result of winning is a lot of what drives gambling as a problem,” Turner adds.
Turner compares current developments to the casino legalization of the 90s when a similar advertising blitz occurred. However, due to the spaced-out placement of casinos, direct competition wasn’t as much of a concern back then when compared to the current digital market today.
“There was some overlap but you didn’t get as much competition for direct customer bases. The competition today is why you’re getting so much advertising right now,” says Turner.
When online sports betting legislation was initially drafted, Turner and his associates were invited to the table by those drafting the upcoming policy. During that time the primary focus was making sure responsible gambling disclaimers were present with every advertisement as well as visible phone numbers for helplines.
Despite this, Turner is concerned that this wasn’t enough, as there is nothing in the way of information that notifies the consumer that this service can pose a major risk to their mental, physical or financial health and comes with the risk of addiction.
"There’s a lot more they can do, they could have tried to put more effort into correcting some of the erroneous beliefs people have about gambling,” says Turner.
What’s more concerning is that the very platform of assistance that is available to those at risk is playing catch-up with this new online sports betting push.
Turner and his team monitor the status of helplines and treatment services available for online gambling as a part of their services and research.
Due to the fairly recent arrival of online sports betting, there has been no recorded uptick in addiction counselling surrounding this specific field. The main player in digital gambling addictions outreach remains to be digital slot machines, online poker and online casinos.
Turner and his team are now resigned to an extensive waiting game, carefully monitoring outreach in order to study any upticks in requested care surrounding online sports betting.
“It takes some time between when people start to use a new form of gambling to when they start to appear in treatment services… Looking at it currently, the helpline data lists online gambling as 40% of the people who call in,” says Turner.
Current monitoring services now have to struggle to distinguish online gambling (slots, poker and casinos) from digital sports betting.
“If people mention a type of game on the hotline it records it, however, most people don’t,” says Turner.
Gambling addictions can have a high rate of denial, which means the controlled group of analysis (those at risk of addiction) are likely to not reach out to seek help or counselling until further down the line.
“When they’re starting to experience problems, it takes a while for those problems to build up to the point where they have to seek treatment. This can take anywhere from six months to five years, depending on the individual,” says Turner.
What is available right now is a series of systems where you can report your concerns with digital sports betting and request counselling or treatment. However, for those tracking treatment requests, there won’t be any way to differentiate the specifications of digital sports betting when compared to other online gambling.
“The helpline doesn’t really help, because they have traditional sports betting on there and online gambling, but when it comes to online sports betting they don’t specify,” says Turner.
The fallout of digital sports betting has yet to be fully assessed. Until the advertising blitz dies down and treatment services are able to categorize it in a way that is traceable, the results of its impact will be muddled.
Further fanning the flame is that there is no fixed demographic for those who are calling in or engaging with these digital betting services, as sports and sports betting are universal in their appeal.
“It cuts across all classes in society, the only class aspect of it is people who are poor generally can’t afford the losses and they are seen as more of a concern. It may be trying to present itself in a way to get more middle-class or upper-class people involved but I’m more concerned about the people who can’t afford to lose and what’s going to happen to them,” says Turner.
Even with limited data, Turner isn’t going to sit with his hands tied and wait for those who are at risk to become impacted. He and his team have begun to take the steps to draft the first case review surrounding the first quarter of the legalization of online sports betting.
“I’ve been in the process of acquiring funding to go through the case files we have and break it down in terms of what games people are engaged in… We’ll look through that and get a sense of if sports betting is increasing in terms of requested treatment,” says Turner.
Until that data is collected and the work is Turner only had this message to convey to those who are struggling with the constant downpour of gambling advertising everywhere they go.
“Remember, seek help if you need it. That’s why we’re here.”