Just what DOES US Sports think about sports betting?

For years Americans have had to travel to viva Las Vegas to legally place a bet on their favorite sports teams.

Now, we are finally starting to move past this highly restrictive framework with individual States hopping on board each month with varying legislative approaches to regulated sports betting. How they regulate and tax will determine the long term success, or not, within that State, but while they sort that out, probably through trial and error, where do the Sports bodies stand on recent seismic developments in the betting industry?

How do they stand to gain financially?

The big-ticket winner is the NFL, expected to rush for an additional $2.33bn. Of that, 75% will come from increased player engagement and consumption of content and products, rather than revenues directly related to betting.

Following the NFL, the MLB is next in line, pitching in with up to $1.1bn in additional revenues, 85% coming from increased player engagement & consumption. As Mark Cuban honestly laid it out, “it can finally become fun to go to a baseball game again.”

The bronze medal goes to the NBA, netting an extra $585m, 77% of which is non-betting related.

Skating in last, behind the big 3 is the NHL, projected to score an extra $216m with 70% from increased player engagement.

The income disparities are clear, the NFL is likely to earn x10 that of the NHL, but the consistent message is – sports betting will drive much higher levels of interest and participation from consumers and that’s where the revenue benefits will really come from.

Do they all agree on how to handle Integrity matters?

Short answer – no!

The NFL wants legal sportsbooks to succeed and understands the revenue potential that could follow. To impose high integrity fees on Operators would make it a long shot for success against the “other guys”, aka the offshore market. Instead, they want to focus on law enforcement and stifling the non-regulated books, thereby creating a thriving regulated sports betting environment without integrity fees, per se.

The NBA and MLB, on the other hand, along with the PGA, have formed a coalition to lobby individual states to approve an “integrity” overhead on Operators to cover the cost of measures such as drug testing, investigations & general monitoring. But there has been somewhat of a climb down by the NBA from a 1% “integrity” fee to 0.25% “royalty” fee (bad press usually requires a re-brand). The MLB, although relatively relaxed about some integrity risks given the average salary level of an MLB player, are not sweating it as much, still doesn’t mean they don’t want a piece of the pie.

The NHL? Well, integrity fees are “something we’ve never pursued” although they’ll probably let the NBA and MLB have a go and if successful will look for something similar. Nice – the old “wait and see” approach.

What else?

Partnerships, that’s what.

While not sports betting, the Cowboys have cozied up with Win Star World Casino in Oklahoma to create the first casino partnership for an NFL team.

MGM has become the official gaming partner of the NBA while rumours are rife about many teams & potential sports betting tie-ups.

The NHL has also struck a deal with MGM to make it an official sports betting partner, while Fan Duel is the official DFS partner.

So …. ?

Leagues – help the regulated guys compete with the offshore market, and work with them to increase interest in the overall sports experience. That’s where the bulk of  revenue potential is anyway. Imposing levies, for integrity purposes or otherwise, will make it more difficult for them to do this and ultimately drive the market offshore as newcomers to the industry become more price savvy over time.

Now College is a whole different story…

 

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