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On 14 May 2018 the Supreme Court ruled that the Professional and Amateur Sports Protection Act banning sports betting was unconstitutional; a ruling that is set to drastically impact the future of sports betting in the US. All major leagues in the US previously argued in court against the proposed change in the law, fearing that the introduction of legalised gambling, as a result, represented a serious threat to the integrity of their respective sports. Despite this threat, key league stakeholders have also at various times expressed interest in leveraging the introduction of legalised gambling as a way of boosting revenues. The illegal and offshore sports betting market in the US is worth USD150 billion (according to the American Gaming Association), a prize that is too large not to entertain for league stakeholders. To understand the scale of the opportunity beyond this number, it’s necessary to look toward other leagues outside the US to determine how this opportunity can be maximised, such as Premier League football.
The volume of gambling partners in England’s Premier League is a prime example of what the future of US sports could potentially look like, should states be willing to introduce laws regulating this. Of the 20 Premier League teams in the 2017-18 season, only Brighton & Hove Albion lacked a betting partner. In many cases, clubs boasted more than one betting partner. Arsenal, for instance, has partnered with 12BET, Betfair, SportPesa and Tempobet. The volume of partnerships is far from the whole story.
From a value perspective, partnership activation is considerable. In 2015, executive director of the Qatar-based International Centre for Sport Security, Chris Eaton, stated that “up to EUR1 billion is bet on each Premier League game” globally; the vast majority of which is done illegally. Bringing betting out of the darkness and introducing legal and regulatory instruments that in turn shelter the integrity of sports has led to many direct and ancillary benefits to the league.
There will be many moving parts over the coming months following the Supreme Court ruling. Firstly, from the legal and regulatory side, there will be the introduction of sports betting bills on a state by state basis to ensure that integrity remains paramount. There will be substantial merger and acquisition activity as international betting operators, in particular, the big players in the UK and Ireland will look to enter or grow their presence in the US market, by partnering with fantasy sports firms in the US. League stakeholders will be thinking long-term, and initially focus heavily on ensuring that all leagues are protected from corruption.
League and team partnerships will be developed with betting operators, and this will not only boost revenues but also awareness and interest. Premier League betting partners have become popular sources for a range of digital content, from sports highlights, live-streaming events to viral marketing content. Irish betting firm Paddy Power, for instance, has over 1.5 million Facebook followers, much of this not attributed directly to betting, but to the success of edgy marketing activations that have drawn both praise and criticism in abundance.
For major sports leagues in the US, legalised sports gambling brings with it many challenges that must be overcome. If they can succeed, the Supreme Court’s landmark decision opens up a new door to value creation, one that will if leveraged correctly will positively impact all-league stakeholders.
To learn more about how the Supreme Court decision will impact sports gambling in the United States, download the free report.