The Business of Sports Betting: How U.S. Sportsbooks Profit and the Costs They Create

Abstract

The purpose of this research was to examine how sportsbooks in the United States used advertising techniques to attract and retain users while ensuring that they remain profitable through bet structuring and odds setting. It also analyzed how these techniques resulted in ethical concerns that the industry has faced since legalization. To do this, a literature review was conducted of both scholarly and contemporary sources that mainly focused on marketing, revenue models and ethical impacts. The research showed that sports betting companies grew rapidly due to aggressive advertising, media and league partnerships, and social media influencer marketing. These companies secured profitability through mechanisms like vigorish and introducing new in-play bets, while ensuring that users stayed on their platforms through loyalty rewards and exclusive promotions. However, these practices have contributed to underage betting, widespread gambling addiction and athlete harassment. These findings suggest that while sportsbooks have created effective marketing strategies and reliable revenue models, future industry practices and government policies should focus on balancing sportsbook profitability with consumer protection, so that the harms of widespread sports betting could be limited.