In the past, iGaming growth was very simple, increasing marketing investment and developing multiple customer acquisition channels could scale expansion. Advertising, like fuel, the more you burn, the larger the market share. However, entering 2025-2026, as advertising platforms impose more restrictions, customer acquisition costs continue to climb, and the wide-net strategy is no longer as effective as before.
Ironically, as the difficulty of advertising execution increases, the strategic value of the brand becomes more prominent. Traditionally, advertising and branding are often interdependent, yet in the current market environment with stricter regulations, the brand has surpassed mere advertising to become a core asset with a more sustainable competitive advantage. It can penetrate superficial exposure and reach directly into the hearts of users, establishing deep emotional connections and long-term trust, which is difficult for pure advertising-driven short-term customer acquisition to match. This is the "promotion paradox" the industry is experiencing.
Specifically, in mature regulated markets, the cost of customer acquisition (CAC) has been rising, currently ranging from $280 to $1400 for operators, with some channels even higher, making customer retention and LTV (Lifetime Value) key to profitability. Ideally, an LTV:CAC ratio of at least 3:1 is required for profitability.
Data shows that CAC has risen by 222%-263% over the past 8-9 years. 🔴Operators focusing on brand management and user retention can control CAC more effectively while enhancing LTV. Some platforms that rely solely on large-scale advertising are facing efficiency declines, with expensive new users and fast churn.
🎰Brand trust can build competitive barriers
In a traffic environment with reduced advertising exposure, players facing homogeneous products (similar odds, game libraries, interfaces) rely more on emotional cognition to choose a "reliable" platform. This is similar to industries like finance and insurance.
For example, the rise of #FanDuel, which has surpassed traditional Las Vegas brands to become the world's most valuable gambling brand (about $7 billion) in the 2025 Brand Finance ranking, through deep integration with sports media, entertainment positioning, and continuous brand narrative.
#DraftKings, starting from daily fantasy sports, combines content marketing, community building, and responsible gambling initiatives to create a "digital sports entertainment destination" image.
European veteran #bet365, when facing strong competitors in new markets, also turns to brand strengthening, emphasizing a reliable experience. They maintain high active users and revenue growth through accumulated reputation.
As advertising impressions significantly decline in some markets (such as a nearly 14% drop in online sports betting digital advertising impressions in the US in 2025), brand power will become a core differentiator. Advertising impressions refer to the number of times an advertisement is successfully displayed (loaded and appears in the user's view), directly reflecting the actual exposure scale of the advertisement. In the context of stricter regulations and increased platform restrictions, the overall available impressions decrease, naturally leading to a decline in the efficiency of strategies relying solely on large-scale exposure.
At this time, strong brand operators can more easily maintain an LTV:CAC ratio of 3:1 or even higher, as loyal customers form a self-propagating effect through repeated consumption and word-of-mouth recommendations, significantly reducing customer acquisition pressure.
The increasing cost of customer acquisition also highlights the value of existing users, with 2% of high-value players often contributing over 50% of revenue, and retention strategies have an even more significant magnifying effect on LTV. 🔴Maintaining player activity is 5-7 times cheaper than acquiring new customers, which is also a core competitive advantage in the context of high CAC.
Under continuous pressure on advertising efficiency, brand-driven retention will contribute more incremental growth over the next 3-5 years.
Operators' budget allocation may shift from 80% of customer acquisition budget to a more balanced investment in platform experience and user loyalty, such as 50/50, with strong brand platforms' user stickiness and word-of-mouth spreading becoming stronger customer acquisition channels, thereby reducing reliance on paid advertising.
Those who invest early in brand building, user experience, and trust accumulation will welcome more sustainable growth opportunities.
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