Day: September 12, 2019
Sports Betting: The Gamble That Will (Or Won’t) Change Sports
As long as there have been organized sports, there’s been gambling tied to those sports. From the Olympics in Ancient Greece to the sportsbooks in Las Vegas, the desire and opportunity to wager on the outcome of an athletic endeavor has been ever-present. And with the lifting of a federal ban on legal sports gambling last year, it’s only a matter of time before major leagues–like, for instance, the NFL–embrace what could be a very lucrative wrinkle in revenue generation.
At present, only a dozen states allow sportsbooks and wagering on the outcomes of games. But it’s a safe bet that once the money starts rolling in, the landscape will change. The big question, though, is will it change sports?
States With Legal Sports Betting on the Rise
In May of 2018, the U.S. Supreme Court ruled against a federal ban against legal sports gambling. As a result, the ruling opened the door for states with legal sports betting to emerge. At present, a total of 12 states with legal sports betting exist, and more are expected to follow soon. The delay for many states relates to decisions about what type of structures and legalities to develop. These issues include whether or not legal sports gambling can be performed on mobile applications. And it involves safeguards about whether or not sports data must be from official or verified sources.
At the present time, the majority of states with legal sports betting require casino registrations for users to participate. Likewise, many also require betting to occur through sportsbooks or casinos themselves. New Jersey is currently one of the few states with legal sports betting that permits users to bet via mobile gaming. Naturally, these issues affect ease-of-use, which in turn affects predictions about how pervasive legal sports gambling may become.
The Good and the Bad of Legal Sports Gambling
From a risk perspective, the NFL is hesitant to jump into bed with states with legal sports betting. Naturally, if larger states like Texas, California, and Florida develop legal structures, then the attraction might increase. But even then, variations among states and specific legalities may limit success. And experts debate whether legal sports gambling will present a real “cash cow” for a large organization like the NFL. These issues, and the fact that monitoring gambling by players, coaches and referees pose their own challenges, limits enthusiasm. At this time, the NFL appears to believe the benefits simply do not justify the risks.
Despite this, some projections suggest legal sports gambling could boost revenues by as much as $2.3 billion. Though the annual NFL revenues are roughly $15 billion, this might be worthy of exploration. The NFL is also likely interested in maintaining consumer engagement through its brand. Therefore, it’s not surprising that the NFL has made some moves in this direction. It recently signed a deal with Sportradar, a sports data firm. Sportradar will have exclusive rights to sell NFL data to casinos and sportsbooks. Such a move indicates the NFL is hedging its own bets for the future.
Too Early in the Game to Call
When it comes to legal sports gambling, the dust needs to settle before the NFL will likely go all in. The potential revenues for smaller sports leagues might be more attractive since legal sports gambling could greater boost their financials. The NFL, however, is likely to wait it out before making larger moves in this direction. When they do, live, in-play betting appears to offer the best opportunity to reap potential rewards. In Europe, where this already exists, in-play betting represents 80 percent of all bets.
Certainly, viewers with money on the line will be more likely to stay tuned to the game. This has already been demonstrated with fantasy gambling leagues like Fan Duel and Draft Kings. And on-screen tickers could provide real-time data to expand betting opportunities. This could add to the diversity in sports already present. Likewise, as more states with legal betting expand, the NFL’s power of negotiation will increase in this area as well. All of this offers new opportunities for the NFL that will need to be further assessed in the future.
In any case, legal sports gambling is here to stay. The questions that remain for the NFL and others is how best to incorporate it into their existing operations. The NFL is in no hurry because it already enjoys a very strong position in the market. In fact, of the top 100 live sports shows last year, 64 of these were NFL games. Therefore, in all probability, the NFL will have the luxury of watching other sports leagues deal with legal sports gambling. If other teams’ gamble pays off, it is likely the NFL will be ready to jump on board as well.
