Major U.S. sportsbooks expect to take an earnings hit of more than $100 million this year from promotions and marketing costs leading up to and through Missouri’s Dec. 1 mobile sports betting launch.
U.S. market share leaders FanDuel and DraftKings project to again spend the most on marketing among major operators. The two books are the No. 1 or No. 2 book by revenue in each of the roughly two-dozen states they offer mobile sports betting, a trend both expect to continue in Missouri.
- FanDuel and DraftKings expect more than $100M in combined losses from promotions and marketing for Missouri’s Dec. 1 mobile betting launch
- Both project big returns: FanDuel sees $400M annually at market maturity, DraftKings $175M
- Up to a dozen sportsbooks, including Caesars, BetMGM and ESPN BET, plan Missouri launches
FanDuel, the No. 1 operator by market share, projects the Missouri launch will cost the company roughly $70 million in adjusted earnings losses. That translates to a loss of $30 million in corporate revenue for calendar year 2025, officials from parent company Flutter Entertainment said in a recent earnings call.
DraftKings officials, during their company’s most recent corporate financial call, expected Missouri promotions to cost between $35 million and $45 million in earnings.
Both companies expect these short-term revenue hits to be worth the investment.
FanDuel projected Missouri would generate $400 million in annual revenue at “market maturity” within the next decade. DraftKings estimated $175 million in annual revenue within the coming years.
As many as 10 other books could also go live Dec. 1, potentially pumping millions of dollars more into additional promotions around the launch. Caesars, BetMGM and ESPN BET are among the companies that have already announced Missouri launch plans and an accompanying promotional campaign.
Marketing boom continues
The two market share leaders have led the multibillion-dollar sports betting promo blitz to capture customers since the Supreme Court struck down the federal wagering ban in 2018. Though major sportsbooks have curtailed marketing costs in the past few years, Missouri’s pending launch, the only set for 2025, show companies are still willing to spend big on new markets.
The major books offered thousands in “no sweat” first bets for new customers between 2018 and 2023, highlighted by a $3,000 promotion by Caesars for New York customers. Those promotions and ensuing advertising cost major operators hundreds of millions of dollars; few sportsbooks turned a single profitable quarter in the first few years after the federal ban’s repeal.
Sportsbooks have cut spending drastically since as more states legalized sports betting; Missouri will be 31st state to launch statewide mobile sports betting while eight other states permit in-person wagering.
After years of marketing, FanDuel and DraftKings both estimate they have more than three million monthly active customers. BetMGM projects nearly one million, while Caesars, BetRivers and ESPN BET all have several hundred thousand apiece.
Combined, legal sportsbooks accepted more than $150 billion in bets in 2024.
The continued, albeit reduced, promotional spend comes as sportsbooks look to continue attracting customers, including those betting with bookies or offshore sites. The American Gaming Association estimates these illegal operators accepted roughly one-third of the action that legal books took in during 2024.
Derek Stevens of Circa Sportsbook, which secured a Missouri sportsbook license last week, estimates the illegal market is three times the size of the legal market.
Missouri’s challenges
In Missouri, sportsbooks will also have to attract new customers who have not already established accounts in neighboring states.
Missouri’s two major metro areas of Kansas City and St. Louis border Kansas and Illinois, respectively, states that have had legal sportsbooks for years. Both metro areas split their neighboring state, easing access to place a legal bet.
Other major urban areas further away from bordering states include Springfield, where voters rejected the 2024 sports betting authorization measure, and Columbia, a college town where a disproportionate number of residents are under the age 21 legal betting age.
Nine books have secured market access or announced plans to pursue a license:
- Bet365
- BetMGM
- Circa
- Caesars
- DraftKings
- ESPN BET
- FanDuel
- Fanatics
- Underdog Sportsbook
Other books that could pursue a license include Bally Bet, BetRivers and Hard Rock.
Every one of the aforementioned books except Underdog is live in Kansas, Illinois or both. Underdog offers fantasy contests in Missouri, Kansas and Illinois.
