Europe: Sports Betting CAC

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EU Sports Betting: CAC

It costs €171.43 for an EU online sports betting operator to acquire one online user.

CAC OF LEOVEGAS GROUP

  • The number of depositing customers in 2018 was 327,156.
  • Marketing cost as a percentage of revenue: 37% .
  • Total revenue: €328 million.
  • Marketing cost: (€328 million) * (37%) = €121.36 million.
  • A = CAC of LeoVegas: marketing cost / number of customers = €370.95

CAC OF PADDY POWER AND BETFAIR

  • The number of active users in 2017 was 1.7 million.
  • The marketing cost in 2017 was €223 million.
  • B = CAC of Paddy Power and Betfair: marketing cost / active users = €131.18

CAC OF BET365

  • The number of customers in 2018 was 35 million.
  • The annual marketing cost for Bet365 is €426 million.
  • C = CAC of Bet365: marketing cost / customers = €12.17

AVERAGE CAC

Average CAC = (A+B+C) / 3 = (370.95+131.18+12.17) / 3 = €171.43

RESEARCH STRATEGY

We started our research by looking for publicly available information on the EU Sports Betting industry. After searching extensively through the public domain, we were not able to find any information that could help us with this particular research.

Next, we looked for the top online betting sites in Europe. We checked sites such as Sportsbettingdime and Oddshark, among others. From the lists that we were able to find, we then chose three companies (LeoVegas, Paddy Power and Betfair, and Bet365) in order to calculate the average customer acquisition cost (CAC).

Having identified the companies, we browsed their annual reports to find the metrics we would need to calculate the CAC. We decided to use the most basic formula of CAC which is (marketing expenses / number of customers acquired) because there are some parameters covered that are not publicly available, such as whether the company may have made investments in a new region or early stage SEO. From the annual reports, we were able to find the number of customers and marketing costs for LeoVegas Group, as well as the marketing spend for Paddy Power.

We were not able to find Bet365's annual reports, so we checked sites such as Forbes, Gamingintelligence and CalvinAyre, among others. From these sources, we were then able to find the number of users for Paddy Powers and Bet365, as well as the estimated marketing expenses per year for Bet365.

We have detailed our findings above.
Sources
Sources

Quotes
  • "One of the most popular and esteemed gambling sites in the UK & Ireland, this household name offers some of the largest odds selections in the industry. "
Quotes
  • "Basically, the CAC can be calculated by simply dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent."
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  • "Paddy Power Betfair supports about 1.7 million active users, 135 million daily transactions, 3.7 billion daily API calls, 2.5 terabytes of daily log data output and about 120,000-per-second monitoring points. "
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  • "Bet365 claims to have 35m customers, making it the world’s largest online gambling company."
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  • "bet365’s annual marketing spend could be as high as £426m per year if its advertising budget matches the UK sector average reported in the latest iGaming Business Market Monitor."