From the launch of online sports betting in March through June, North Carolina operator promotional spending has dropped more than 85%.
This isn’t surprising.
It is common for sports betting companies to spend lavishly on promotions at the outset to entice new customers. However, we will likely see a rise and fall with the ebb and flow of major sports events throughout the year. The next of which will be the college football and NFL seasons beginning next month.
The state’s monthly promo wagering revenue, generated from bets where players use welcome bonuses and other incentives, compared to the overall monthly paid wagering revenue, provides a gauge of the amount of promo spending by operators. As well, a comparison of betting data from neighboring Virginia gives some insight into what North Carolinians can expect to see in NC sportsbook promos come fall.
Promo spending in NC so far
As defined by the NC Lottery, “promo wagering revenue” is the amount of promotional funds players use when placing bets. “Total wagering revenue” is the total of the paid and promo wagering revenue.
North Carolina Promo Spending To Date
| Month/Year | Paid Wagering Revenue | Promo Wagering Revenue | Total Wagering Revenue (Handle) | Promos as % of total revenue | Adjusted Gross Wagering Revenue |
|---|---|---|---|---|---|
| March 24 | $456,702,602 | $202,605,909 | $659,308,541 | 30.7 | ($136,109,696) |
| April 24 | $569,283,605 | $79,650,621 | $648,934,226 | 12.3 | $25,601,051 |
| May 24 | $494,602,507 | $30,946,064 | $525,548,571 | 5.9 | $32,134,283 |
| June 24 | $381,801,154 | $16,450,309 | $398,251,464 | 4.1 | $23,851,954 |
| TOTALS | $1,902,389,868 | $329,652,903 | $2,232,042,802 | 14.8 | ($54,522,408) |
During the first month of sports betting, players generated nearly $203 million in wagering revenue using promotions like welcome bonuses. This figure accounted for nearly 31% of the total wagering revenue. Some wagers were also canceled or voided.
Operators paid out almost $591 million in winnings which left them in the red for their adjusted gross revenue (the gross wagering revenue minus the money operators spent on promotional credits and actual revenue made by operators in a given month).
By June, promo spending dropped to just a little over 4% of total wagering revenue.
Comparing promo spending in NC and Virginia
A breakdown of the promo spending in nearby Virginia may give NC residents some insight into the future of this type of incentive spending in the Tar Heel State.
Virginia promo spending at launch
| Month | Gross Gaming Revenue | Promo Spending | Promos as percentage of GGR |
|---|---|---|---|
| Feb. 2021 | $18,702,284 | $13,187,560 | 70.5 |
| March 2021 | $26,573,877 | $10,340,533 | 38.9 |
| April 2021 | $19,442,317 | $5,529,294 | 28.4 |
| Sept. 2021 | $30,929,244 | $17,422,068 | 56.3 |
| Oct. 2021 | $30,160,385 | $15,805,261 | 52.4 |
| Nov. 2021 | $48,337,037 | $14,993,073 | 40.0 |
During the first full month of legal sports betting in Virginia (Feb. 2021), promo spending represented 70% of the total wagering revenue. Important to note here is that in its first year and a half of online sports betting, Virginia operators could deduct promo spending from their taxable revenue. This incentivized them to offer heavy promo offers. In North Carolina, operators do not have this luxury. All promo spending is part of an operator’s sports betting revenue.
Virginia promo spending tapered off for the next three months but still stayed well above 25% of total revenue. It then picked up again in September with the start of the college and NFL seasons. The next two months dipped slightly, but Virginia operators were clearly looking at a new customer acquisition wave in line with the state’s first football season with legal online sports betting.
Again, this is not an apples-to-apples comparison. North Carolina sportsbooks do not have the luxury of deducting promo spend from their taxable revenue. So, we won’t see near the wave of promo offers that Virginians saw back in September 2021. This is also in line with national trends of diminished promo spending. However, it’s feasible to imagine that come September, North Carolina sportsbooks could ramp up promo spending to percentages that mirror those at launch.
Wider sports landscape and fewer gambling restrictions in North Carolina
Unlike North Carolina, Virginia doesn’t have any major professional sports teams but several pro teams in nearby Washington, D.C. give residents teams to adopt. North Carolina has a team in every major league except for MLB and the WNBA.
In addition, Virginians can’t bet on in-state college teams, leaving them to cross state lines, perhaps into North Carolina, to wager on home-state favorites. Furthermore, North Carolina has 19 NCAA Division I programs compared to 14 in Virginia with more teams in the only Power 5 conference in both states–the ACC.
This year begins a new era in the ACC as it becomes a coast-to-coast super conference with the addition of three teams, including powerhouse Stanford and California, both from the Pac-12, as well as Southern Methodist from the American Athletic Conference.
For these reasons, it’s possible that NC college football betting will lead to a slightly larger wave of promo spending come fall. Still, North Carolinians should not expect to see the high percentage of offers Virginians saw three years ago.
Types of promotions bettors will continue to see
Just because operators are not spending as much on promos doesn’t mean that bettors won’t see enticing offers in the future. There are several types of ongoing promotions, such as odds boosts, reload bonuses, referral offers, and loyalty rewards.
Special event promotions for sporting events are also common. Operators also offer referral bonuses and perks via loyalty programs.
Currently, sportsbooks are offering Olympic promos. The Paris Games run from July 26 through Aug. 12. The best promos target new customers.
Expect similar promos to coincide with the beginning of the college football on Aug. 24. The NFL season kicks off soon after on Sept. 5. Two months later, the NCAA Division I basketball season starts on Nov. 4. To end the year, the college football playoffs begin in late December with the first round of games on Dec. 20 and 21.
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