Source- Pngtree
Sports betting companies are making some serious money. In 2023, they pulled in over $11bn in revenue (ESPN). Following on from this, 2024 is projected to be the biggest year yet for revenue yet, with the current projected figure sitting at $50b. This officially makes the sports betting industry one of the biggest and most powerful on the planet — but how exactly is it achieving such incredible revenue levels?
How Sports Betting Companies Make Money: Explained
If you’re wondering where all the money is coming from, you’re not alone. From the outside looking in, it’s hard to comprehend that any industry is capable of ticking the $50b revenue box, but this is something that the global sports betting industry is set to do. To make things simple for you, here’s a look at how sports betting companies make money.
💳 Accepting Different Payment Methods
Over the past decade, most sports betting sites and apps have started accepting a variety of different payment methods, with many of these sportsbooks now accepting PayPal. On top of this, you can also make deposits using bank cards, credit cards, Apple Pay, and other popular platforms, too. This has allowed the sports betting industry to spread its wings and appeal to younger (and more modern) gamblers.
💰 The Vigorish
Whether you’re a professional or casual sports bettor, you’ve probably never heard of the vigorish, also known as “the vig”. Essentially, this is a very small fee that sports betting companies charge every time you place a bet. And although these fees are only small, they add up to huge revenue levels over time. This is why a company like FanDuel was able to achieve $3.23bn revenue in 2022. Without the vig, every major sports betting company you can think of would lose a significant percentage of their profits — that’s how important it is to the business model.
🚀 Odd Boosts
Next, odd boosts. For a long time, sportsbooks have been offering special odd boosts (where the potential payout is increased) so that they can attract more bettors. It’s a strategy that’s worked extremely well so far and will continue to be an important cog of the revenue machine moving forward. The better the odd boosts, the more bets you receive. It’s really that simple.
👑 VIP Member Programs
Almost all of the major sports betting companies offer VIP member programs. Some good examples of this include BetMGM, bet365, and DraftKings. With DraftKings in particular, you get to experience better promotional offers, high-quality customer support, entry to giveaways, and much more. These types of incentives are major revenue drivers that help to get more people placing bets throughout the year, which is why VIP programs have become such a focal point in the sports betting world.
✨ Celebrity Endorsements
Lastly, the sports betting industry will achieve $50bn in revenue in 2024 with the help of celebrity endorsements. Over the years, some mega-stars have been part of sports gambling ads, such as Jamie Foxx. This has helped to grow brand recognition and get more people signed up to betting sites, which is why sports betting companies are constantly searching for the next hottest celebrity to work with them.
