Sports Betting Apps Have Low Awareness Despite Large Advertising Spend: Survey

A survey from Civic Science shows low brand awareness for sports betting apps despite national advertising campaigns.

What Happened: The survey from Civic Science shows that sports betting apps from FanDuel, DraftKings Inc DKNG and Penn National Gaming’s PENN Barstool Sportsbook have low usage and weak awareness.

The survey results include only responders in states where an app operates, according to Civic Science. 

FanDuel and DraftKings lead the way, with 6% of respondents saying they used the app or intend to use it.

Only 1% of responders say they have used Barstool Sportsbook or plan on using the app, which was the lowest of the group. 

Bet Rivers and Fox Bet saw 3% and 2%, respectively, usage or intent to use from respondents.

Sixty-four percent of respondents in Pennsylvania said they're unaware of Barstool Sportsbook. 

DraftKings and FanDuel ranked better, with 50% and 43%, respectively, of respondents being unaware of the app in their state.

Advertising Spend: The sports betting market is seeing strong growth and higher total addressable market estimates. 

The sports betting companies have differing strategies to acquire customers. Barstool Sportsbook is spending zero on advertising, instead relying on a loyal fan base from the Barstool websites and social media accounts.

DraftKings is spending $200 million per quarter on advertising.

DraftKings and Caesars Entertainment CZR also signed deals with Walt Disney Company DIS brand ESPN to get backlinks to their apps. DraftKings spent $100 million on advertising in the first half of 2020.

It is estimated that FanDuel will spend $185 million on advertising in the second half of 2020.

Increased Sports Betting Competition: FanDuel and DraftKings have a head start with large user bases of daily fantasy players that can be converted to sports betting players.

The Barstool Sportsbook saw strong download figures during its first weekend in Pennsylvania.

Wynn Resorts WYNN signed a deal with GAN Limited GAN to power its sports betting app, which is scheduled for a November launch in Michigan.  

Macquarie analyst Chad Beynon said the Wynn deal is “an important catalyst for GAN” given Michigan’s population of 10 million.

The analyst expects the deal with Wynn to add $3 million in revenue by 2025 assuming 5% market share in Michigan. 

Benzinga’s Take: The survey shows that there is still a lack of awareness among sports betting apps in their respective markets.

This could mean there is a lack of brand awareness, and with new entries, the market could become more saturated. DraftKings and FanDuel may continue to spend massive amounts on advertising to try and gain market share.

The survey could also point to the need for consolidation among players in the sports betting market.

DKNG, PENN Price Action: Shares of DraftKings are up over 450% in 2020. Penn National shares are up over 175% this year.