Sports Betting Sites Could Face Super Bowl Sunday 'Scaries' Amid Profitability Push

A major customer-acquisition event, the Super Bowl, is approaching for sportsbook operators. But after, a period of austerity may be looming.

Geoff Zochodne - Senior News Analyst at Covers.com
Geoff Zochodne ? Senior News Analyst
Feb 6, 2023 ? 15:42 ET ? 4 min read
Patrick Mahomes Kansas City Chiefs NFL
Photo By - USA TODAY Sports

Like their customers, online sports betting sites may be heading for a case of the “Sunday scaries” this weekend.

But the usual anxiety that can build up as Monday and another week of work draw closer — the aforementioned “scaries” — could be exacerbated by the fact that this Sunday is Super Bowl Sunday, a huge day for sportsbooks. 

Furthermore, this year’s Super Bowl will arrive as bookmakers are promising profitability after years of red ink. Analysts at Jefferies Group LLC, a financial-services firm, wrote in a report released Monday that they “expect an inflection point in 2023” for online sports betting operators.  

“Despite the rally thus far this year, valuations for digital wagering companies remain depressed as the market is highly focused on near-term profitability and cash burn,” the Jefferies analysts said. “Nevertheless, most operators have suggested 2023 should be the year when they turn [earnings before interest, taxes, depreciation, and amortization] positive, which should provide catalysts for the stocks.” 

In short, then, this Super Bowl, which will be the first played in a state with legal sports betting, could mark a watershed moment for the online gambling industry.

When Monday rolls around, the super-popular football season will be over for bettors and bookies, but the push for profitability among operators will still be there, which could be enough to send Sunday scaries shooting through executives as the confetti falls in Arizona

And how operators try to turn their earnings positive could be felt by gamblers, who may find themselves with fewer free bets and other promotions directed their way. That is because one of the levers companies can pull is on the expense side, cutting spending and jobs. 

That lever is already in use. DraftKings is reportedly shrinking its workforce by about 3.5% as the Boston-based bookmaker strives to reach adjusted profitability in the fourth quarter of 2023. 

Targets acquired

Promotional spending by sportsbooks has already begun to come back down to earth as well. The Jefferies analysts said “marketing intensity has been meaningfully reduced” since last year’s Super Bowl. 

Mike Raffensperger, the chief commercial officer for FanDuel, said during a capital markets day in November that 80% of the operator’s promotional spending now happens in a “targeted” fashion. So even while promotions remain a major cost for FanDuel, which has the biggest share of the U.S. sports betting market, the company is finding ways to curb those expenses. 

“We spend as a percentage of revenue less than any other operator in the marketplace by a wide margin,” Raffensperger said.

Meanwhile, BetMGM told investors last month that it anticipates less money this year from its owners, Entain PLC and MGM Resorts International. The two companies said they expected to pump around $450 million into their joint venture in 2022, but this year, the expectation is for $150 million to be spent on BetMGM. 

If that's the case, Entain and MGM will have spent approximately $1.25 billion on BetMGM in less than five years. And, as the operator is forecasting positive earnings in the second half of 2023, that financial support could soon be gone, leaving the bookmaker to get by on its own efforts.

“Assuming no major changes to our environment and target markets, we expect financial support for BetMGM to come to an end, as we move into profitability in the U.S.,” Entain CEO Jette Nygaard-Andersen said during a trading update last week.

Big game, big spending

But there are a few occasions when spending big on promotions may always be warranted. One is the opening of a new market, such as Ohio recently or California or Texas in the future. Another is an event that provides an opportunity to acquire customers, such as the Super Bowl, which will attract plenty of action from recreational and professional bettors. 

Billions will likely be wagered on this year's Big Game. Making a good impression on Sunday could be key to winning and keeping the business of bettors. 

And operators only have so many opportunities to make a splash with consumers, with a recent Ipsos poll finding 73% of sports bettors it surveyed wager once a month or less. Moreover, the Jefferies report said 41% of respondents to its survey "indicated they only bet on major sporting events, making the Super Bowl critical to attract new users." 

So another round of spending on the Big Game seems to be in order. Afterward, though, could be a period of austerity for operators, especially since there is no more NFL football until the fall, depriving customers of their favorite betting markets. 

“What you always see coming out of the Super Bowl is everybody pulls back on spending,” FanDuel CEO Amy Howe said during their investor day

In the (watch)dog house

Recent media reporting about the sports-betting industry has also given a jolt to lawmakers and regulators, resulting in fines for operators and new rules being proposed for the sector overall. It's in this stricter environment that companies will have to carve out profits for themselves, which could heighten their anxiety on Super Bowl Sunday. 

Still, the financial and regulatory constraints on companies could provide their own opportunities. 

Howe noted that their competitors cut their spending more dramatically than usual following last year’s Super Bowl, prompting FanDuel to spend to scoop up even more of the market.

After all, March Madness is just around the corner, and the cost of acquiring customers could wind up lower than the value those players ultimately provide. 

“And when we see that formula work, we are going to lean in, just as we did this year,” Howe said in November. 

Pages related to this topic

Geoff Zochodne, Covers Sports Betting Journalist
Senior News Analyst

Geoff has been writing about the legalization and regulation of sports betting in Canada and the United States for more than three years. His work has included coverage of launches in New York, Ohio, and Ontario, numerous court proceedings, and the decriminalization of single-game wagering by Canadian lawmakers. As an expert on the growing online gambling industry in North America, Geoff has appeared on and been cited by publications and networks such as Axios, TSN Radio, and VSiN. Prior to joining Covers, he spent 10 years as a journalist reporting on business and politics, including a stint at the Ontario legislature. More recently, Geoff¡¯s work has focused on the pending launch of a competitive iGaming market in Alberta, the evolution of major companies within the gambling industry, and efforts by U.S. state regulators to rein in offshore activity and college player prop betting.

Popular Content

Legal Canadian sports betting

Best Canadian betting sites Ontario sports betting
Covers is verified safe by: Evalon Logo GPWA Logo GDPR Logo GeoTrust Logo Evalon Logo
seductrice.net
universo-virtual.com
buytrendz.net
thisforall.net
benchpressgains.com
qthzb.com
mindhunter9.com
dwjqp1.com
secure-signup.net
ahaayy.com
tressesindia.com
puresybian.com
krpano-chs.com
cre8workshop.com
hdkino.org
peixun021.com
qz786.com
utahperformingartscenter.org
worldqrmconference.com
shangyuwh.com
eejssdfsdfdfjsd.com
playminecraftfreeonline.com
trekvietnamtour.com
your-business-articles.com
essaywritingservice10.com
hindusamaaj.com
joggingvideo.com
wandercoups.com
wormblaster.net
tongchengchuyange0004.com
internetknowing.com
breachurch.com
peachesnginburlesque.com
dataarchitectoo.com
clientfunnelformula.com
30pps.com
cherylroll.com
ks2252.com
prowp.net
webmanicura.com
sofietsshotel.com
facetorch.com
nylawyerreview.com
apapromotions.com
shareparelli.com
goeaglepointe.com
thegreenmanpubphuket.com
karotorossian.com
publicsensor.com
taiwandefence.com
epcsur.com
southstills.com
tvtv98.com
thewellington-hotel.com
bccaipiao.com
colectoresindustrialesgs.com
shenanddcg.com
capriartfilmfestival.com
replicabreitlingsale.com
thaiamarinnewtoncorner.com
gkmcww.com
mbnkbj.com
andrewbrennandesign.com
cod54.com
luobinzhang.com
faithfirst.net
zjyc28.com
tongchengjinyeyouyue0004.com
nhuan6.com
kftz5k.com
oldgardensflowers.com
lightupthefloor.com
bahamamamas-stjohns.com
ly2818.com
905onthebay.com
fonemenu.com
notanothermovie.com
ukrainehighclassescort.com
meincmagazine.com
av-5858.com
yallerdawg.com
donkeythemovie.com
corporatehospitalitygroup.com
boboyy88.com
miteinander-lernen.com
dannayconsulting.com
officialtomsshoesoutletstore.com
forsale-amoxil-amoxicillin.net
generictadalafil-canada.net
guitarlessonseastlondon.com
lesliesrestaurants.com
mattyno9.com
nri-homeloans.com
rtgvisas-qatar.com
salbutamolventolinonline.net
sportsinjuries.info
wedsna.com
rgkntk.com
bkkmarketplace.com
zxqcwx.com
breakupprogram.com
boxcardc.com
unblockyoutubeindonesia.com
fabulousbookmark.com
beat-the.com
guatemala-sailfishing-vacations-charters.com
magie-marketing.com
kingstonliteracy.com
guitaraffinity.com
eurelookinggoodapparel.com
howtolosecheekfat.net
marioncma.org
oliviadavismusic.com
shantelcampbellrealestate.com
shopleborn13.com
topindiafree.com
v-visitors.net
djjky.com
053hh.com
originbluei.com
baucishotel.com
33kkn.com
intrinsiqresearch.com
mariaescort-kiev.com
mymaguk.com
sponsored4u.com
crimsonclass.com
bataillenavale.com
searchtile.com
ze-stribrnych-struh.com
zenithalhype.com
modalpkv.com
bouisset-lafforgue.com
useupload.com
37r.net
autoankauf-muenster.com
bantinbongda.net
bilgius.com
brabustermagazine.com
indigrow.org
miicrosofts.net
mysmiletravel.com
selinasims.com
spellcubesapp.com
usa-faction.com
hypoallergenicdogsnames.com
dailyupdatez.com
foodphotographyreviews.com
cricutcom-setup.com
chprowebdesign.com
katyrealty-kanepa.com
tasramar.com
bilgipinari.org
four-am.com
indiarepublicday.com
inquick-enbooks.com
iracmpi.com
kakaschoenen.com
lsm99flash.com
nana1255.com
ngen-niagara.com
technwzs.com
virtualonlinecasino1345.com
wallpapertop.net
casino-natali.com
iprofit-internet.com
denochemexicana.com
eventhalfkg.com
medcon-taiwan.com
life-himawari.com
myriamshomes.com
nightmarevue.com
healthandfitnesslives.com
androidnews-jp.com
allstarsru.com
bestofthebuckeyestate.com
bestofthefirststate.com
bestwireless7.com
britsmile.com
declarationintermittent.com
findhereall.com
jingyou888.com
lsm99deal.com
lsm99galaxy.com
moozatech.com
nuagh.com
patliyo.com
philomenamagikz.net
rckouba.net
saturnunipessoallda.com
tallahasseefrolics.com
thematurehardcore.net
totalenvironment-inthatquietearth.com
velislavakaymakanova.com
vermontenergetic.com
kakakpintar.com
begorgeouslady.com
1800birks4u.com
2wheelstogo.com
6strip4you.com
bigdata-world.net
emailandco.net
gacapal.com
jharpost.com
krishnaastro.com
lsm99credit.com
mascalzonicampani.com
sitemapxml.org
thecityslums.net
topagh.com
flairnetwebdesign.com
rajasthancarservices.com
bangkaeair.com
beneventocoupon.com
noternet.org
oqtive.com
smilebrightrx.com
decollage-etiquette.com
1millionbestdownloads.com
7658.info
bidbass.com
devlopworldtech.com
digitalmarketingrajkot.com
fluginfo.net
naqlafshk.com
passion-decouverte.com
playsirius.com
spacceleratorintl.com
stikyballs.com
top10way.com
yokidsyogurt.com
zszyhl.com
16firthcrescent.com
abogadolaboralistamd.com
apk2wap.com
aromacremeria.com
banparacard.com
bosmanraws.com
businessproviderblog.com
caltonosa.com
calvaryrevivalchurch.org
chastenedsoulwithabrokenheart.com
cheminotsgardcevennes.com
cooksspot.com
cqxzpt.com
deesywig.com
deltacartoonmaps.com
despixelsetdeshommes.com
duocoracaobrasileiro.com
fareshopbd.com
goodpainspills.com
hemendekor.com
kobisitecdn.com
makaigoods.com
mgs1454.com
piccadillyresidences.com
radiolaondafresca.com
rubendorf.com
searchengineimprov.com
sellmyhrvahome.com
shugahouseessentials.com
sonihullquad.com
subtractkilos.com
valeriekelmansky.com
vipasdigitalmarketing.com
voolivrerj.com
zeelonggroup.com
1015southrockhill.com
10x10b.com
111-online-casinos.com
191cb.com
3665arpentunitd.com
aitesonics.com
bag-shokunin.com
brightotech.com
communication-digitale-services.com
covoakland.org
dariaprimapack.com
freefortniteaccountss.com
gatebizglobal.com
global1entertainmentnews.com
greatytene.com
hiroshiwakita.com
iktodaypk.com
jahatsakong.com
meadowbrookgolfgroup.com
newsbharati.net
platinumstudiosdesign.com
slotxogamesplay.com
strikestaruk.com
trucosdefortnite.com
ufabetrune.com
weddedtowhitmore.com
12940brycecanyonunitb.com
1311dietrichoaks.com
2monarchtraceunit303.com
601legendhill.com
850elaine.com
adieusolasomade.com
andora-ke.com
bestslotxogames.com
cannagomcallen.com
endlesslyhot.com
iestpjva.com
ouqprint.com
pwmaplefest.com
qtylmr.com
rb88betting.com
buscadogues.com
1007macfm.com
born-wild.com
growthinvests.com
promocode-casino.com
proyectogalgoargentina.com
wbthompson-art.com
whitemountainwheels.com
7thavehvl.com
developmethis.com
funkydogbowties.com
travelodgegrandjunction.com
gao-town.com
globalmarketsuite.com
blogshippo.com
hdbka.com
proboards67.com
outletonline-michaelkors.com
kalkis-research.com
thuthuatit.net
buckcash.com
hollistercanada.com
docterror.com
asadart.com
vmayke.org
erwincomputers.com
dirimart.org
okkii.com
loteriasdecehegin.com
mountanalog.com
healingtaobritain.com
ttxmonitor.com
nwordpress.com
11bolabonanza.com