According to many financial analysts, the true transformation of the economics of American football has only started with the legislation of welcome bonus casino sports betting. Today, football fans in 12 states can bet on the games in some form or another and the option is expected to expand to additional states in the coming months.
However, as of November 2012, the NFL hasn’t changed much. While the NHL, NBA and MLB have all started to forge partnerships with betting operators in one form or another, the NFL is playing it cool.
No Need To Integrate
Christopher Halpin, NFL Chief Strategy and Growth officer, explained the NFL’s current strategy. “We get great engagement, we don’t need to integrate sports betting directly into that. “We haven’t opened up the category.”
The NFL believes that it’s not necessarily to their advantage to jump into the sports betting market. Residents in states with legalized betting make up less than 20 percent of the U.S. population. Even in most of those states, mobile betting isn’t legal. So the league isn’t seeing any reason to rush to partner with the companies that offer such apps.
TV networks that show N.F.L. games concur, in part because of the terms of their broadcast contracts. Fred Gaudelli, the longtime producer of NBC’s football telecasts explains that, for decades, NFL television contracts have prohibited announcers from talking about gambling. Even though some networks are beginning conversations with the NFL about “what’s possible, going forward,” most observers expect that sports betting references will still be “somewhat isolated” – at least this season.
Fox Sports will allow betting references on-air “if it makes sense and our announcers can organically work it in,” said a FOX spokesperson, while at ESPN, there are “no plans to discuss gambling” on-air during game telecasts. In short, viewers shouldn’t expect announcers discussing on-field action as it relates to the spread or odds.
None of the networks have plans to air commercials for sports betting. NFL’s Halpin says that the league will be monitoring ad loads. “We wouldn’t allow it to be jammed in their face,” said Halpin.
If and when mobile betting becomes more widespread, the NFL might be more amenable to partnering in a sports betting collaboration.
The delay in bringing mobile sports betting to NFL fans is a big consideration in the NFL’s position. Mobile betting has the potential to be a game-changer since the difference between mobile and no-mobile sports betting is significant.
For instance, in New Jersey, the state with the most liberal mobile betting laws, roughly 80 percent of wagering is done through apps. Much of New Jersey’s sports handle now comes from New Yorkers who cross the Jersey border to place a quick mobile bet and then return to New York within half an hour.
New Jersey also offers sports betters multiple opportunities to place mobile bets – at the FanDuel sportsbook at the Meadowlands in East Rutherford, inside the Hoboken train station in-between an incoming train and an outgoing train or even at rest stops along the New York-New Jersey highway.
Mobile bets account for billions of dollars every year for New Jersey and if the opportunity seems irresistible, the NFL will almost certainly join the wave. But with its enormous mass-market audience already in its hip pocket, the NFL believes that there are better ways for it to benefit from the sport.
That doesn’t mean that the NFL is oblivious to the potential that sports betting – and the industry that surrounds it – offers. Last month, the NFL expanded its partnership with Sportradar, a sports data company. The deal gives Sportradar the exclusive right to sell official NFL data to sports books and casinos throughout the world. Sportradar CEO Carsten Koerl has called the agreement “undoubtedly one of the most important partnerships in Sportradar’s history.”
Currently, only Illinois and Tennessee have laws that mandate that, when determining certain wagers, bookmakers buy and use official league data. But as more sportsbooks offer more live, in-play wagers, they will find that they need the Sportradar information. In-play bets must often be made within seconds so the Sportradar data will be a goldmine as such bets become more widespread.
In fact, in-play bets are still the dominant form of sports betting overseas. According to Bet365, one of the UK’s largest bookmakers, approximately 80 percent of its revenue comes from in-play betting. Industry analysts believe that it will make up at least 50% of U.S. sports betting in the coming years.
Robin Chhabra, the chief executive of Fox Bet which is a collaboration between The Stars Group and Fox Sports says “The quality of the data, the speed of the data and in some instances the data may allow us to offer prop bets that other people can’t have.”
Last year, the NFL earned $15 billion. There has to be a lot of potential in the sports betting market for the NFL to get involved. It all depends on which states legalize and how quickly. The NFL is particularly monitoring legislation in the populous state like New York, Texas, California and Florida. The NFL would like to see Congress get involved and enact some type of federal regulation to avoid this patchwork of state laws. Thus far, Congress doesn’t appear to be interested in acting on sports betting.
Neilson and the American Gaming Association project that the NFL could earn an annual $2.3 billion from legal sports betting. That’s more than half of the income of all the sports leagues which, the AGA and Neilson say, could potentially take in $4.2 billion. Most of that would be gained from increased fan interest wile the rest would come from betting operators.
The NFL, however, is skeptical. The NFL has approximately 15.8 viewers, as opposed to sports leagues with television audiences of hundreds of thousands of viewers. Those smaller league, says Halpin, “may see more uplift on that base for live consumption of their regular season games than I think we will.”
According to Halpin, it’s not in the NFL’s best interests, at this point, to disrupt domestic telecasts that are presently worth over $7 billion. “You can’t even predict which states will legalize when and under what constructs, and what the U.S. sports book market will look like, or the advertising market.”
Even if the NFL decides to go all-out for sports betting, they might find that other sports outpace them. Last year, basketball betting made up almost as much of Nevada’s sportsbook handle as did football. Also, outside the United States, American football is not very popular but NBA basketball is.
All in all, the NFL, which fought against sports betting for so long, might adopt it in the end. But it will take time.