The NFL, along with the other major sports leagues, fought legalized sports betting for years. Now it stands to rake in billions because of the activity.
There isn’t an expert, New Jersey state representative, or Atlantic City casino owner that doesn’t expect strong revenue figures from sports betting. One topic that hasn’t been discussed nearly as much is how sports betting will help the major sports leagues grow.
Well, now the American Gaming Association (AGA) is weighing in. Heading into fall where football will dominate the Sunday airwaves, it makes sense that the AGA is talking about how sports betting, NJ sports betting too, will benefit the NFL.
NFL expected to grow by $2.3 billion a year
The AGA commissioned Nielson Sports to conduct a study to analyze the impact of legalized sports betting on the NFL’s various revenue streams.
Those revenue streams include:
- Advertising partnerships
- Data and sponsorship
- Media consumption
- Licensed product sales
According to the study, legalized sports betting can result in greater fan engagement and viewership. That engagement translates to approximately $1.75 billion (a 13.4 percent increase) in additional revenue from media rights, sponsorships, merchandise, and ticket sales.
Sara Slane, senior vice president of public affairs for the American Gaming Association, spoke about the study’s findings in a press release.
“Legal, regulated sports betting will create huge new revenue opportunities for sports leagues – and the NFL could be the biggest winner of all. Once legal sports betting expands across the country, the NFL could take in more than $2 billion a year, reinforcing how much sports leagues stand to gain from increased viewership and private partnerships with sports betting operators.”
The survey also notes the NFL will benefit from $573 million in direct revenue from “sports betting operators and data providers.” The direct revenue manifests itself through advertising, sponsorships, and data.
What does all this mean for the NFL?
CNN Money reported the league brought in $8.2 billion last year. Even to the richest of all the major sports leagues, $2.3 billion is nothing to sneeze at. Even so, the NFL saw an average of a 10 percent fall in viewership. Most likely, the decline was a result of player protests and injuries of some of the league’s biggest stars.
An increase in fan engagement is the perfect anecdote. It is likely fans betting on the games will watch the games. They will become more invested in their favorite teams and favorite players. At the very least, they will park themselves in front of a TV somewhere hoping to see a return on their investment.
According to a previous study commissioned by the AGA, 19 percent of current NFL fans bet on games, either casually or consistently. The study estimates that number to jump to 31 percent with legal sports betting.
During the year, the sports betting market will see about a 60 percent increase in betting on the NFL. That figure is the most significant growth of all the leagues and will translate into big money.
What about integrity fees?
The revenue projections from the study do not include integrity fees. Integrity fees have been a hot topic between the leagues and the states while regulating sports betting. The AGA is on record as opposing integrity fees.
Slane spoke to ESPN about the topic:
“So much time has been spent on talk over integrity fees. We think these numbers are conservative and show that the league is frankly tripping over dollars to pick up pennies.”
In contrast, the AGA does support the leagues selling official data reports. League data is mostly used for in-game betting and can add another $30 million to the league’s bottom line.
ESPN obtained a memo in July where the NFL wanted to require the purchase of official league data by any casino advertising with the league.
To repeat, the AGA supports operators choosing to purchase league data. On the other hand, the AGA opposes the requirement of an operator to buy official league data.
Image credit: ChameleonsEye / Shutterstock.com