Sports Betting App Monetization Models


Sports betting is one of the fastest growing industries in the United States these days, exploding across the country in the five years since the Supreme Court overturned a federal ban on the pastime. While there are dozens of different betting apps to choose from, depending on what state you live in, they aren’t all created equal.

There are plenty of commonalities they share, like the basic philosophy of wagering money in the hopes of winning big or the alluring promotions they run, but here’s a look at the different models that platforms use to succeed.

Fantasy Sports

Fantasy sports betting platforms like DraftKings (2012) and FanDuel (2009) started springing up nearly a decade before sports betting properly became legal in much of the United States, and they still possess specific privileges that other platforms don’t have.

Fantasy sports betting is akin to skill-based games such as poker or blackjack, which have successfully navigated federal regulations. At the heart of it, the best sports betting apps reward players based on their skill and knowledge. Success is determined by making shrewd choices in selecting players who will perform well building a team according to specific guidelines and constraints, rather than relying on random outcomes of a single winner or loser.

This format is available to users starting at the age of 18 in most states, unlike traditional forms of gambling, which are restricted to players who are 21 or older.


That opens their consumer base to a larger group of people than the traditional sports betting apps do, and it also helps them buy loyal customers starting from a younger age: if someone has been winning money on DraftKings from the moment they turned 18, they might be more likely to continue using DraftKings for regular sports wagers once they’re able to.

The mobile fantasy sports betting craze capitalizes on the popularity of individual fantasy leagues among family members and friends, taking a model that sports fans already love and applying it to a larger crowd, creating bigger winnings for successful customers and bookies alike.

In fact, the popularity of fantasy sports betting apps took off in the mid-2010s, a few years before the federal ban on sports betting was lifted: they may have been instrumental in that decision, the blowing winds of change spurring the sports betting craze.

Traditional Sports Betting Monetization

When it comes to traditional sports betting on game outcomes, diversity is the name of the game. In the early days of legalization in the United States, options were pretty limited. You could bet on the outcome of games, picking outright winners or who would beat or cover the spread, as well as some future options like who would win the Super Bowl or World Series.


As the industry continues to expand, though, it becomes clear that people will bet on anything, provided that there’s an opportunity to do so. Betting options have expanded dramatically, with the opportunity to bet on player statistics like the number of yards a wide receiver compiles or the number of touchdowns a quarterback throws for.

We’ve also seen an increase in the number of leagues with betting lines offered. Rather than sticking to their guns with the four major North American professional sports leagues—the NFL, NBA, MLB, and NHL—betting platforms are starting to offer lines on overseas leagues, whether mainstream ones like the English Premier League or those that are relatively under the radar like the Lithuanian women’s basketball league. Esports are another field that’s starting to see betting lines offered and will continue to grow in the coming year.

By inundating customers with a variety of sports and outcomes to bet on, betting platforms ensure that they have a product for just about everyone to make use of. This onslaught of betting options means they’ve cornered every available sports betting market, a business model that’s sure to see success at the relatively low operating cost of floating out a few extra betting lines.

Promotions Aplenty

Another major way that sports betting apps make their millions is through tax-deductible promotions. Betting platforms will offer things like deposit matches and risk-free or second-chance bets in order to lure in new customers, a gambit that has two-fold benefits. If a bettor loses their first bet, triggering one of the credit back promotions to kick in, betting platforms can write the win they forsake off as a business loss, reducing the amount of taxable income they have to report.

Similarly, the potential to play with the house’s money and wins is quite enticing, so betting platforms are bringing in new customers en masse and effectively getting paid to do so. There’s a reason why you see ads for these promotions everywhere… because they work.