Four major US professional sports leagues could see $4.2 billion annually from legal betting, according to survey

The four major US professional sports leagues could reap a combined $4.2 billion annually as a result of legal sports betting, most of it indirectly from increased fan engagement, according to a casino industry survey

Reuters October 18, 2018 21:02:53 IST
Four major US professional sports leagues could see $4.2 billion annually from legal betting, according to survey

New York: The four major US professional sports leagues could reap a combined $4.2 billion annually as a result of legal sports betting, most of it indirectly from increased fan engagement, according to a casino industry survey to be released later on Thursday.

Four major US professional sports leagues could see 42 billion annually from legal betting according to survey

Gamblers place bets on sports at Monmouth Park Sports Book by William Hill, shortly after the opening of the first day of legal betting on sports in Oceanport, New Jersey. Reuters

The National Football League stands to make the most, with a projected $2.33 billion of additional annual revenue, according to the study seen by Reuters. Major League Baseball, the National Basketball Association and the National Hockey League would account for the rest.

The Nielsen Sports survey was commissioned by the American Gaming Association (AGA), which represents the casino industry.

The findings could add fuel to a long-simmering feud between the gaming industry and American sports leagues over whether to share revenues.

For years, the leagues fought states’ efforts to legalize sports betting, arguing that it would lead to game fixing and ruin integrity.

But in May, the US Supreme Court threw out a federal ban against sports betting, paving the way for any state to legalize, regulate and tax the activity.

Since then, the leagues have sought to glean a portion of the coming windfall. Leagues say legalization means they need to fund additional integrity measures, and that they deserve a portion of wagers because there would be nothing to bet on without their players, their stadiums and the games they put on.

Major League Baseball, for instance, has said it wants 1 percent of the total amount of money bet, as a so-called “integrity fee.”

Lawmakers in New Jersey, the first major state outside of Nevada to roll out sports betting, flatly rejected that idea.

At last week’s annual Global Gaming Expo in Las Vegas, tensions flared when Kenny Gersh, an MLB executive vice president, said during a panel event that the integrity fee should be called a “royalty” and that leagues had lowered their ask to just 0.25 percent.

“You want a cut of the revenue without any of the risk,” shot back fellow panelist Sara Slane, the AGA’s senior vice president of public affairs.

“We have to go through a regulatory process. We invest billions of dollars in buildings and our licenses,” she said. “You want us to take that risk, pay you, and then you’re going to benefit on the back end as well.”

The AGA study found that $596 million of leagues’ total increased annual revenues would come from gaming services spending on television advertising, $267 million from sponsorship deals with the sports betting industry and $89 million from data and video revenue.

But the rest would come if more fans – attracted by the appeal of being able to lay bets – watch games and are drawn into stadiums. The biggest portion of the total increase – nearly $3.3 billion – would come from those indirect revenues, including media rights and more merchandise and ticket sales.

For the NFL alone, indirect revenues could grow 13.4 percent to $14.8 billion of annual revenue, the report said.

The study has a margin of error of three percentage points and surveyed more than 1,000 adult sports fans and those who were self-identified bettors nationwide, asking how a national legal market would affect sports consumption habits.

The national market would need to include at least 100 million people for the leagues to fully benefit, Nielsen estimated.

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