There is competition in every industry. And in the Igaming industry, it can be a little intense. We already have thousands of igaming platforms everywhere on the internet, and new ones keep coming out every day. This simply means that every single igaming platform out there, whether sports betting sites or online casinos, is competing for the attention of users or customers.
In any business, this kind of competition is done through marketing, promotions, and different kinds of strategic customer acquisition efforts. And guess what, these things cost money, which is what we want to talk about.
So, let us go a little deeper into the economics of customer acquisition in the igaming industry:
Customer Acquisition Cost (CAC)
As mentioned earlier, implementing a customer acquisition strategy costs money. CAC simply tells iGaming operators how much they are spending, on average, to bring in a single new user.
To determine this, the platform divides the total amount spent on acquisition (ads, bonuses, affiliate fees, etc.) by the number of new users who signed up. For example, if the platform spent £1000 and brought in 20 new users, then the cost of acquiring one customer or user is £50.
However, in reality, especially in competitive iGaming markets, CAC is often much higher. As of recent industry benchmarks, acquisition costs typically range from £280 to £1,400 per player, depending on the market, product type, and acquisition channel. In more mature and highly regulated markets like the UK or Germany, CAC usually falls within £250 to £650 per first-time depositor, while anything below £200 is considered highly efficient.
This means that it can actually be very expensive to acquire quality users in the iGaming space. But acquisition cost alone tells only half the story. To know whether that spend was worth it, operators need to measure what a player actually returns, and in iGaming, that return is measured in Net Gaming Revenue (NGR).
NGR is what remains after deducting all costs directly tied to that player: bonuses issued, affiliate commissions, regional gaming taxes, and payment processing fees. This is the operator's true net revenue from that player, and it is what Lifetime Value is built on.
Lifetime Value (LTV) of a Player
Getting a user to sign up or make their first deposit does not mean the platform has made a profit on that user. What determines if they have actually recouped or even get a return on the cost of acquisition spent on that user boils down to LTV.
In iGaming, LTV is specifically the Net Gaming Revenue (NGR) a player generates over their entire relationship with the platform. It is determined by three things: how long the player stays active from the first time they made a deposit, how much NGR they generate per month during that period, and what is left after all net adjustments are stripped out.
For example, if a player is acquired at a CAC of £250. They stay active for 18 months, depositing £100 every month. The platform operates on a 5% house edge, meaning they expect to retain roughly 5% of all money wagered. Over 18 months, that produces £90 in Gross Gaming Revenue (Total Amount Wagered − Winnings Paid Out).
Let’s say they also deduct a £20 welcome bonus issued at sign-up and £10 in payment processing and tax costs, the platform's NGR from this player is £60. Against a £250 acquisition cost, the platform has made a £190 loss on that user.
In short, high deposits do not equal high value. The operator's job is to maximise NGR per player, across as long a lifespan as possible, because that is the only number that actually determines whether acquisition spend was worth it.
The CAC-LTV Ratio
The CAC-LTV ratio tells an operator whether they are profitable or not. In a healthy igaming operation, the target is usually at least 1:3. In other words, for every dollar the platform spends in acquiring a player, they should at least get £3 in NGR during the period the player spent using the platform. If the ratio is 1:1 or lower, the operator is losing money.
Customer Acquisition and Customer Acquisition Methods in iGaming?
The customer of an igaming platform would be somebody who is actually using the platform. This can be a bettor betting on a game of football, basketball, esports, or any other game. It could also be a player playing a casino game, whether poker, slot, roulette, etc.
Customer acquisition, therefore, refers to the deliberate efforts that an iGaming platform makes to attract and convert these bettors and players into active users, despite the wide range of competing options available to them. They use different means to achieve this, including:
- Paid ads (Google, social media)
- Promotions
- Sponsorships (media, sports teams, influencers)
- Content Marketing
- Referral Programs
- Paid ads
Paid advertisement is a go-to strategy for customer acquisition across every industry. Today, social media ads are usually the most preferred, because social media is the part of the internet that people actually stay on the most. Apart from social media, there’s also Google Ads, display ads on websites, in-app ads on mobile games, etc.
The cost of ads, however, varies across these platforms, depending on factors like competition, targeting, and geography. For instance, Google search ads for betting-related keywords can be extremely expensive due to high competition, with a cost-per-click of around about £10-£50.
Promotions
Simply put, with a promotion, the platform is trying to give users specific reasons to choose them immediately. It could be through a welcome bonus, which passes the message that if a user signs up to an online casino, they immediately get a free bonus credit to start with. Promotions could also come in the form of cashback offers, deposit bonuses…
And of course, promotions also cost the platforms money. Every free spin or bonus they offer users is another potential revenue that they could have pocketed.
Sponsorships
iGaming platforms can also offer to sponsor sports teams, influencers, media platforms, or content creators. Sponsorships are one of the most expensive customer acquisition strategies. For example, paying a football club to have your name written on their jerseys literally costs millions of dollars.
Content Marketing
Content marketing revolves around content, both visual and written. In the iGaming space, this could be blog articles, match previews, betting tips, odds analysis, casino guides, videos, and even social media content designed to inform or entertain users.
Content marketing appears to be one of the cheapest acquisition strategies. It’s also considered one of the most cost-effective in the long term, though it usually takes relatively longer to start generating results.
Referral Programs
Referral is another customer acquisition technique that a lot of igaming platforms have adopted lately. The idea is to incentivize existing users to bring in new users. The existing user gets a referral link or code that will ensure that they actually get the reward for every new user that comes in through them.
Many betting sites and online casinos combine this with influencer marketing. That is, influencers are given referral codes or links, and with their influence, they try to convince as many people as possible to sign up.
Conclusion
iGaming platforms employ different techniques to get new users to use their platforms, and the costs vary with different platforms. But then, customer acquisition does not end when users eventually sign up or make their first deposit. There’s also a place of retaining the users to the point where they actually make a return on the amount they’ve spent to acquire them in the first place.
