How Casinos Rake More Income Than Sports Betting Operators

Nseobong Okon-Ekong writes that the adrenaline-pumping excitement in sports betting does not necessarily translate to income; rather, the more even-paced play at the casinos may be where the money resides

At a stimulating lottery industry engagement of stakeholders by the rested National Lottery Regulatory Commission (NLRC), there was a bit of a debate on why the regulator demanded more financial commitment from casino operators than sports betting companies. Speaking from an informed position of one who sees all the transactions, the operator revealed that casinos make more money than sports betting operators. 

What many may not have taken cognizance of is that while sports betting is largely seasonal, thus featuring periods of high and low tide income, casinos enjoy a steady flow of income from an enduring engagement that can only be determined by the player.

Sports betting companies have since overcome that obstacle by generating virtual games that may be played on and off-season. However, the surrounding entertainment factors make casinos far more compelling to players. Sophistication in tools and players’ character has led to a huge migration of players to online platforms, whether as sports betting bettors or casino players. There is now a convergence of interests in the virtual space.

An analysis of prevailing gaming trends by Glimpse shows that online gambling is an industry that’s prone to explosive growth. Smaller companies operate at the periphery of the law and grow fast enough to get unfriendly attention from regulators. Even large companies are vulnerable when the rules change. This constant churn means that there is always room for new sites to arise. Novibet, a Greek gaming site rapidly growing in popularity, showcases these trends.

Online gambling, compared to the real-world variety, offers fewer opportunities for some kinds of cheating and advantage play; card-counting doesn’t work when shuffling is no longer imperfect, for example. The low overhead from online casinos means they can offer higher payouts and sign-up bonuses. A real-world casino has a near zero “bounce rate”: almost everyone who shows up will bet on something. Websites in high-monetization verticals have to pay up for traffic, and they use sign-up bonuses and favourable odds to keep their bounce rate low.

Meanwhile, the low cost of software relative to hardware means that they can rapidly extend gambling to new kinds of bets. On Novibet, gamblers can wager on casino games and sports games, but they can also place bets on the outcome of reality TV shows. For example, search interest in Novibet doubled during the three-month run of Big Brother’s 13th season. Flexible gambling sites can take advantage of the dynamics of TV: when sports aren’t available, reality TV is an affordable source of live entertainment.

Online gambling relies on trusted payment networks, and the cost of payments is often a significant component of their cost structure. Gambling, like adult content, is a high-risk payment category where chargebacks are more common, and the incidence of fraud is high, so the cost of processing payments is higher than for other kinds of commerce. For sites like Onlyfans, the payment processing fee is almost double Stripe’s standard rate. As payment companies get more comfortable with gambling, the number of payment options has risen, which acts as an implicit subsidy to the industry.