Sports betting brands have contributed nearly $400 million to the major sports leagues in terms of sponsorship deals since the Professional and Amateur Sports Protection Act (PASPA) was overturned in 2018, a research from GlobalData revealed.
Growth Exceeds Expectations
According to data from GlobalData Sports Intelligence Center the betting industry, in less than 3 years, injected $396.6 million to the major professional leagues in the US, with the lion’s share, 36.5%, going to the National Football League (NFL).
The National Basketball League (NBA) and Major League Baseball (MLB) were way behind the NFL with 24.4% and 23% from the total amount, respectively, while the National Hockey League (NHL) accounted for 13% and Major League Soccer (MLS) registered its presence in the sponsorship agreements list by mere 2.7%.
“The growth of the sports betting industry in the US is by far exceeding the initial expectations for the market.”Liam Fox, Sport Analyst, GlobalData
Everything started only 3 months after PASPA was overturned, in August 2018, when MGM became an official partner for the NBA, shortly after followed by an agreement between the casino and hospitality operator and the NHL. Nowadays, a host of leagues and teams have partnership deals with sportsbook and daily fantasy sports operators in place.
One factor which influenced growth, Fox continued, was the devastating impact on state economies of the coronavirus outbreak and the huge gaps it opened in budget deficits, forcing state governments to scramble for extra sources of revenue.
Besides, there was a revision of prevoious anti-gambling sentiment, shifting to a more receptive attitude to sports betting and expanding sports wagering options, and looking to maximize tax revenue from the revenue stream sports betting generates, the sport analyst from GlobalData concluded.
Leagues More Receptive to Sportsbooks
GlobalData sponsorship data also outlined a shift in the perception of sports betting from the major leagues, which had been strong opposition to the legalization of the lucrative business for decades, but now see that sports betting brands can generate a large chunk of income for them.
In November, the NBA which suffered a 10% drop in revenue to $8.3 billion for the 2019/20 season, announced a change in policy. The league said it would be loosening its restrictions on the franchises with regards to sponsorship deals with casino and sportsbook operators, irrespective of the state in which sponsors reside.
“A loosening of restrictions regarding betting sponsorships has been identified as a mechanism to generate crucial commercial income to offset the revenue shortfalls elsewhere.”GlobalData
GlobalData concluded that the role of the betting industry with sports leagues would continue to grow as professional leagues seek to compensate missed revenues from tickets and hospitality due to the impact of the coronavirus.