Modern gambling relies on free bets, bonuses and other promotions to gain customers’ attention and incentivise them to place more bets.
But what would happen if a ban or limit was implemented on bookmaker’s marketing activities and do bookmakers offer too many free bets and bonuses in 2019?
The bonus culture of modern gambling
The bookmakers use hundreds of free bets and other promotions to acquire most of their new customers along with retaining existing customers.
From sign up free bets, to enhanced odds to match specials, the bookies offer it all.
Without this emphasis on bonuses, it would be interesting to see where and how successful betting companies would be at gaining and keeping customers.
What’s more, this strategy obviously works very well.
Bet365 offer matched deposit of £200
Until recently, Bet365 were offering new customers one of the most rewarding promotions in the sports betting industry.
They offered new customers a matched deposit of up to £200 when they signed up. This is a ridiculous bonus and one that no doubt caught a lot of people’s attention.
You’re probably wondering how Bet365 made any money when they were offering such a large sign up offer.
But when you look at Bet365’s finances, you can see why they stuck with this marketing strategy.
They made over £500 million in net profit, they paid nearly £80 million in tax and their CEO and founder, Denise Coates took home over £265 million. Just in 2017…
Something’s obviously working for Bet365!
Bet365 have since reduced the size of the bonus to £100. In my view, that’s still a huge amount to potentially give out to every new customer.
It’s not just Bet365 who’ve had great success with the bonus culture in modern gambling.
888Sport increase marketing budget
888Sport have also had great results from increasing their marketing budget.
Back in 2016, 888Sport increased their total marketing spend from £52 million to £70 million.
This extra marketing spend saw an 82% increase in customer acquisition.
You can bet that a great deal of that overall marketing budget went to free bets and other promotions.
One of the main reasons for the bonus culture in modern gambling is due to the sheer number of competitors in the industry.
Bookies find it hard to stand out above the rest meaning they must offer bigger and better promotions than their competitors.
This increase in competition has mainly been caused by the shift from high-street to online betting.
With that comes;
- Reduced barriers to entry for new bookies
- Greater market share
Reduced barriers to entry
Whilst the betting industry is at its most competitive, the cost of opening a new bookmaker is far less compared to the brick and mortar days when the likes of Ladbrokes and Coral were founded.
It’s much cheaper for potential companies to get started than it was say 10 years ago.
That’s one of the reasons the number of online bookmakers has grown significantly since the rise of the internet and will continue to do so for the foreseeable future.
The likes of Smarkets and 888Sport are great examples.
Both of these companies were founded in 2008, just over 10 years ago. Today they’re certainly up there with the industry leaders that have been around for nearly 100 years.
Greater market share
The betting market is a huge industry meaning more companies want a piece of the action.
Since the rise of online gambling, the industry has seen exponential growth mainly due to the ease of placing bets on mobile and other handheld devices.
The total gross gambling yield (GGY) of the UK was £14.4 billion between April 2017 and March 2018.
And this trend is set to continue. According to Statista, the online gambling market is expected to increase from $45.8 billion USD in 2017 to $94.4 billion USD by 2024.
Obviously more companies want to get in on the action before it’s too late.
Is the betting market oversaturated?
Since the huge uptake in the number of online betting companies, the industry has become incredibly competitive.
But has it become too saturated and are the smaller players losing out?
In 2019, there are 100s of different online bookmakers a potential customer can sign up to. How do you choose which is the best option?
Thankfully with sites like The Sure Bettor that process is made much easier. Check out this guide for the top 10 bookmakers.
In my view there are too many online bookies offering the same features and products.
On the flip side, some bettors are constantly after promotions and other bonuses.
These bettors would obviously say there aren’t enough free bets around. But you have to remember these bettors are after as many promotions as possible.
The more they can get their hands on, the more money they make.
With regards to the smaller and new bookmakers like MoPlay and BetRegal, they have a hard time trying to compete against the likes of Bet365 and Ladbrokes.
Their marketing budget is obviously considerably smaller meaning they can’t offer such attractive promotions.
Brand recognition also plays a key role in where bettors are likely to open a new account and place their bets. However, this generally comes down to marketing budget again.
Overall size of the gambling market
The gambling market is one of the biggest and most lucrative industries in the world and this is only set to continue as more countries around the world ease their laws surrounding gambling.
As you can see from the image above, the industry is expected to grow at a staggering rate over the next five years or so.
A lot of this growth will come from the US as their laws become more liberal towards gambling as a whole.
One thing’s for sure, the betting market isn’t going anywhere anytime soon.
What do bookmakers think?
Different bookmakers have different opinions on the bonus culture in the betting industry.
Some companies think it’s ridiculous and feel forced into offering free bets and other promotions to keep pace with other bookmakers.
For the likes of Bet365 and some of the other big online players I doubt they are too worried about the amount of money they spend on marketing.
As we saw earlier, it’s clearly working.
Do bookmakers offer too many bonuses?
So, to the question of do bookmakers offer too many bonuses?
The answer to this question will be very subjective and different individuals and companies will have very different opinions.
Matched bettors and those who take advantage of promotions want as many as free bets and promotions as they can get their hands on.
Furthermore certain companies within the gambling industry want the number of bonuses to be reduced as this would save them millions in costs.
The interesting thing would be to see if they lose out in terms of revenue as well.
I guess we may never find out!
Let me know whether you think bookmakers offer too many free bets by leaving a comment below right now.