It’s the gold rush that we never expected, but the sports betting industry is officially booming. Since the Supreme Court ruled that the federal ban on sports betting was unconstitutional, almost half of the nation’s states have legalized sports betting, and it doesn’t look like it’s easing up any time soon.
In Missouri alone, there are currently 22 sports betting bills up for discussion in the upcoming legislative session. Meanwhile, here in Texas we have the sports betting alliance pushing hard to get legislation passed—although we may have to wait until 2023 before any potential launch.
The reason for this sudden rush to push through legislation is simple—money. Last November, the state of Illinois collected over $12.7 million in taxes from sports betting alone. And that’s not even one of the top states in terms of revenue.
It should come as no surprise that betting companies, both US-based and those from abroad, are investing heavily in the American market. After all, there’s gold to be found if you know where to look.
Investing in media
The lines between media and sports betting are starting to blur as operators are now increasingly taking control of the media and content that sports bettors consume.
Take DraftKings for example. The Daily Fantasy Sports operator is now one of the leading names in sports betting across the United States. As of January 2022, it is licensed to operate its mobile sports betting app in 15 states and counting.
In March of 2021, the company announced that it had purchased gambling media company Vegas Sports Information Network Inc. (VSiN). This was just the latest in a string of media deals and partnerships that now see the brand name appear anywhere from sports podcasts to pre-game programming of major league sports.
Another example is the deal between sports podcast network Blue Wire and WynnBet. The deal saw WynnBet invest $3.5 million in the media company and build a state-of-the-art studio in Wynn Las Vegas in exchange for part ownership.
Other partnership agreements between sports betting operators and media companies have resulted in sponsored programming, contests, and even free-to-play games being made available to audiences.
Licensing
While media programming works very well for sports betting, online casino gambling is a slightly different matter. With a huge number of online casinos available online and thousands of games to choose from, operators need to come up with ways to attract new customers. This can include promotions such as casino no deposit bonuses or free spins for newly registered players.
But promotions like those often tend to attract customers who are already seasoned gamblers. To pull in those new customers who have yet to try online casino gaming, operators try different approaches.
And one of the most popular approaches is through licensing the intellectual property of an entertainment company or sports team. For example, there are quite a few movie themed slots games that combine slots with the biggest productions in Hollywood.
Some casino games developers have even gone so far as to sign agreements with sporting leagues such as the deal inked between Aristocrat Gaming and the NFL.
Sports partnerships
If there’s one thing that sports betting companies know, it’s the mind of a sports fan. They understand that fans are fiercely loyal to their team so much so that simply being associated with the team gives a brand the upperhand in a crowded marketplace.
This has seen some huge partnership deals signed between major league teams and sports betting companies. For example Betway is now the official sports betting partner of the 76ers and the Flyers in Philadelphia while DraftKings has partnered with the Houston Rockets here in Texas.
Sports partnerships have been so successful that even casino operators are striking deals with pro teams. Remember when the Dallas Cowboys made history by becoming the first NFL team to partner with a casino back in 2018? Well, those kinds of deals are pretty commonplace right now.
Advertising
Last but by no means least, we come to advertising. Ad spend by sports betting companies alone hit $1.2 billion in 2021 and is expected to grow to $2.1 billion in 2022. Analysts predict that DraftKings and Fanduel will spend $400 million on ads in the next three years. And that’s before we even consider the US online casino industry which is also enjoying a period of massive growth.
Ad spend for online gambling at local US TV networks has skyrocketed from $10.7 million in the first quarter of 2019 to $154 million for the same period in 2021. Analysts predict that gambling ads could drive as much as $587 million in ad revenue to local TV networks by 2024.
While much of this ad spend is driven by the legalization of sports betting in multiple states, it’s clear that, if anything, it will only increase further in the coming years.
And all of this investment seems to be working. DraftKings recently revealed that monthly unique players rose from 684,000 in 2019 to 883,000 in 2020. This coincided with a customer’s average monthly rising by $12 to $51.
While sports betting or online gambling of any kind has yet to come to Texas, it will be interesting to see just how much operators invest in the market if legislation is passed. After all, we do have quite a few major league teams right here in the Lone Star State.
