The global sports betting industry is growing rapidly, with revenue projected to reach £60.6 billion (US$77.87 billion) in 2025 and £73.9 billion (US$94.99 billion) by 2029, at a CAGR of 5.09 percent.
The report prepared by ad-tech company TrafficGuard, which works with brands like William Hill, Ladbrokes and 5,000 others to stop ad fraud, bots, and wasted ad spend in digital marketing, shows that market consolidation is evident, as a few dominant players control the space while smaller operators struggle to break through.
The sports betting industry is segmented into four tiers: Tier 1 operators make up 7 percent of the market (59 operators), Tier 2 accounts for 10 percent (81 operators), Tier 3 covers 29 percent (233 operators), and Tier 4 represents the largest share at 54 percent (434 operators). Compliance is critical, with 100 percent of Tier 1 and Tier 2 operators licensed, 92 percent of Tier 3 licensed, and 83 percent of Tier 4 licensed.
Traffic data highlights a strong reliance on returning customers, with 76.8 percent of total traffic coming from repeat users. Tier 1 leads with 1.17 billion total visitors, but only 261.9 million are unique, while Tier 2 has 342.5 million total visitors and 85 million unique users. Tier 3 follows with 295.7 million total visitors and 70.3 million unique users, and Tier 4 lags behind at 74.9 million total visitors with only 21.1 million unique users. The industry’s dependence on repeat users raises concerns about the sustainability of new customer acquisition.
Advertising costs remain high, with the average Cost Per Acquisition (CPA) ranging from $250 to $500 per user and a lifetime value (LTV) of $2,000 to $5,000. However, a major challenge is invalid traffic (IVT), which inflates ad metrics and drains budgets. Across the board, IVT rates are significant, with Tier 1 at 44 percent, Tier 2 at 29 percent, Tier 3 at 42 percent, and Tier 4 at 33 percent, making fraud detection a crucial factor in optimizing ad spend.
Brazil is emerging as a dominant market, offering significant opportunities across all tiers, with an estimated $10 billion in annual betting revenue and a mobile-first audience. The United States remains a key market but faces regulatory barriers, while the United Kingdom remains a stronghold for mid-tier operators. Mobile betting continues to rise, with 84 percent of operators having a mobile app. While 91.5 percent of Tier 1 operators offer apps, only 79.9 percent of Tier 4 operators do, signaling an opportunity for smaller players to enhance their mobile presence.
The sports betting industry is at a tipping point, with major players solidifying dominance but still struggling with challenges like 44 percent IVT rates and 40 percent wasted ad spend. Smaller operators, especially in Tier 4, face an uphill battle with 55 percent invalid clicks and 19 percent budget loss.
Success of sports betting companies will depend on execution, mobile user experience, effective acquisition strategies, and robust fraud prevention. Brazil offers a lucrative opportunity, but only for those who can scale efficiently without excessive reliance on bots or recycled users. The key to winning in the sports betting market is prioritizing efficiency over volume.
Baburajan Kizhakedath
