U.S. sports leagues set to reap a $4.2 billion sports betting harvest

The four major U.S. professional sports leagues could reap a combined $4.2 billion (GBP 3.2 billion) annually as a result of legalised and liberalised sports betting in individual US states, most of it indirectly from increased fan engagement, according to a casino industry survey to be released later today (Thursday.)

Carried out by the respected Nielsen Sports research firm on a commission from the American Gaming Association, the study shows that the National Football League (NFL) stands to make the most, with a projected $2.33 billion of additional annual revenue. Major League Baseball (MLB), the National Basketball Association (NBA) and the National Hockey League (NHL) would account for the rest.

The projections do not include the controversial “integrity fee” which the leagues have demanded from operators despite opposing the liberalisation of sports betting every step of the way for the past several years, and observers have opined that the survey could add fuel to the feud between the gambling industry and American sports leagues over whether to share revenues.

The leagues claim that liberalisation and a widened spread of sports betting threatens the integrity of the games and a creates the need to fund additional integrity measures. They additionally claim that without their games there would be nothing for punters to bet on, so they deserve a slice of the action.

Thus far, the majority of lawmakers in the states that have legalised sports betting have rejected these demands, along with requirements by the league that they control the use of sports data generated by the games.

The opposing positions led to an interesting clash between the AGA and the leagues at the G2E conference and expo recently, where 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 demand to just 0.25 percent.

That was met by a riposte from a spokesperson for the AGA who fired back: “You want a cut of the revenue without any of the risk. We have to go through a regulatory process. We invest billions of dollars in buildings and our licenses. You want us to take that risk, pay you, and then you’re going to benefit on the back end as well.”

The Nielsen 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.

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 projects.