With the passing of legislation allowing the regulation of real money online casinos and sportsbooks in certain US States, it seems you always see an advertisement for Bet MGM, Draft Kings, Fan Duel or any of the large regulated online gaming sites. Watching Game 1 of the Stanley Cup Finals last night, regulated gaming sites had ads on the ice and/or commercials just about the entire game. My question is, where is all the money for this advertisement coming from?
Advertising is crucial for any business in a competitive market, but when there are substitutions for the same product that does not spend money on advertising, generally that product is cheaper. So how does that apply to the gaming market?
I have no idea how much money is spend on advertising by these regulated gaming sites. I do know they advertise in some very lucrative spots during major sporting events, which we all know is not cheap. So where do they get the funds to spend so heavily on advertising? It would have to come from their gaming revenue, thus making the casino or sportsbook less profitable than other casino or sportsbook operators who do not advertise.
So for sake of argument, lets call a well established regulated casino operator in the US Brand “A” and an offshore well established online casino operator Brand “B”. If both brands have the same amount of “handle” (which is the total amount of dollars wagered) they should technically make close to the same amount of revenue. You also have to assume both brands employ the same amount of personnel since they are similar in size, and both have the same amount of general expenses related to operating an online casino. With that said, their profit should be close to equal.
The online gaming business is pretty competitive, and that is why you will see many smaller or start up operators fail so easily. So in the above example, both Brand A and B should make about the same amount of profit, and in business that is the expectation that you are either better or very close to your competitors. So where does all the extra advertising money come from?
I think I may have an idea! First I must preface by saying this all just intuition and conjecture, but well thought out. I have not had the opportunity to examine any operators income statement and I am just using common sense and my own business knowledge to make a well informed conjecture.
Where Does Advertising Money Come From?
So again, if both brands make the same amount of profit through operations of their casino, and both have a comparable staff since they are similar in size, then they should make the same amount of profit. So I ask again, where are the regulated operators getting all this money to spend on advertising?
My answer to that question is they must operate using a higher casino advantage. This would mean they pay out less in winnings for every dollar gambled. And if that is true, players lose more money at these regulated, highly advertised online casino brands. They must.
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If I had the choice to play at two different online casinos and one had a lower casino advantage than the other, then of course I will play where I have a better chance of winning. Why would I want less of a chance to win?
In Summary
The above was a rather long way to imply, in my opinion, the regulated online casinos that spend such large amounts of money on advertising, must payout less to players than an online casino that does not spend on advertising. In other words, I believe you have a better chance of winning, and winning more, using an offshore online casino that does not have to spend money advertising their brand.
BetOnline, for example, is our top recommended USA live casino being in business since 2001. BetOnline is one of the largest operators in the business and offers players an online casino (including a live dealer casino), an online and traditional call in sportsbook and an online poker room. Check out our BetOnline Casino review for more details.
Do not pay for an online casinos advertising budget. Play at one of our reputable live dealer casinos which all offer a standard online casino as well. USA players are welcome at every casino listed here on our website and by using one of our links to visit the casino you will receive the best sign up bonuses available. If you want the best chance of winning playing online, use an offshore online casino.