Ad Age: Online Gambling Sites to Drop Billions on Ads, Could Surpass Insurance Companies

The next big boom in advertising, according to a report released by industry trade publication Ad Age, it’s online gambling. 

With poker sites already legalized in the state of Nevada with a federal measure now drafted by political power players Harry Reid and Jon Kyl, Ad Age predicts that some $4 billion will be spent on the online gambling sector over the next five years. That's more than General Motors spent in U.S. advertising in 2011.

The Las Vegas casinos are likely to begin placing advertisements for their online poker products as early as January even though the Silver State is only one of two that have legalized the activity, the other being Delaware. 

Simon Holliday, director at H2 Gambling Capital, estimates the gross value of the online-gambling market to be $1 billion in 2014 and exceed $13 billion over a decade -- but not without the help of a major marketing spree.

"Driving players to their sites is the biggest single cost of these companies," he said. "It is probable that 25% to 30% of company net revenues [20% less than the gross including bonuses] will be spent on advertising and marketing budgets in the initial years, as there is a land grab."

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The biggest beneficiaries will likely be digital media and agencies.

"Five years ago, the combined spend of all onsite-based gaming companies in online advertising was very small, limited to SEO for attracting visitors to book hotel rooms online and to come to the website," said Mitch Garber, CEO of Caesars Interactive Entertainment and World Series of Poker. "It's changing dramatically. ... There's no question that as an industry we'll be spending more time and money on interactive advertising."

Garber’s company has already placed classified ads searching for a creative agency to “oversee digital-media planning, buying and search”.

One industry executive told Ad Age he expects that if online gambling is legalized in at least five states, the big casinos will double their marketing budgets, becoming top clients for ad agencies.

- Aaron Goldstein, Gambling911.com