No. 5, May 2026

Note on operator marketing costs

Marketing is the largest discretionary line in almost every online gambling operator's accounts. Among the listed operators we track, marketing expense commonly runs between a fifth and a third of net gaming revenue, and for operators pushing into new markets it can exceed half for several quarters. This note breaks the line into its three working parts.

Media

Above-the-line media, television, sponsorship, programmatic and paid search, is the visible part and the most cyclical. Regulated markets with advertising restrictions have pushed operators toward the channels that remain permitted, which concentrates demand and raises prices in them. Several earnings calls this year described paid search costs per click rising even as overall media budgets were held flat, a combination that only resolves by buying fewer clicks. We read the 2025 and 2026 filings as showing genuine media discipline at the mature operators and none at the challengers.

Bonuses

Bonus and promotional cost is the ambiguous part, some operators book it as a marketing expense, others net it out of revenue, which makes cross-company comparison treacherous. Wherever it is booked, it behaves like acquisition spend, it is priced per recruited player and it is the first thing cut when a market matures. The trend we can document is toward smaller headline offers with tighter wagering terms, a change regulators pushed for and finance directors quietly welcomed.

Affiliates

Affiliate fees are the performance-priced part and the subject of a separate note. For this note's purpose the relevant fact is scale, for many mid-sized operators the affiliate channel delivers a third or more of new depositing players, at a cost that arrives as revenue share liabilities stretching years forward. It is the only marketing cost that compounds after the campaign ends.

What discipline would mean

The operators showing the best marketing efficiency in filings share three habits. They measure cost per retained player rather than per registration. They cap bonus liability per market and let volume float. And they defend the cheap traffic they already own, players searching the operator's own name, before buying expensive strangers. That last habit is rarer than it should be, and our July note on brand search behaviour returns to it with data.

We expect marketing cost ratios to fall industry-wide over the next two years, not from virtue but from arithmetic, several large markets are approaching penetration levels where paying twice for the same players stops working.