NFL New Relaxed Stance On Sports Betting Could Bring In Billions In Additional Revenue
Soon, the most profitable sports league in the United States will make even more money thanks to nationwide sports betting legislation in the US.
A Nielsen Sports study of over 1,000 sports fans and self-identified sports bettors commissioned by the American Gaming Association (AGA) found the National Football League (NFL) annual revenue may increase by $2.3 billion a year due to widely available, legal, regulated sports betting.
The NFL generated around $14 billion in revenue for the 2017 season, an increase of almost 5% from the previous season with $8.2 billion made nationally and $5-6 billion made from local revenue.
The study showed legal sports betting becoming more available across the country would create greater fan engagement and viewership, and the NFL could gain $1.75 billion, an increase of 13.4%, in new annual revenue from media rights, sponsorships, merchandise, and ticket sales off increased consumption of the NFL’s products.
In addition, legalized sports betting could generate $573 million in revenue for the NFL because of predicted spending by betting operators and data providers with $451 million spent on advertising, $92 million spent on sponsorship deals, and $30 million generated from data and product revenue for third-party gambling services.
AGA Senior Vice President of Public Affairs Sara Slane stated in the study’s press release she expects the passing of legal sports betting across the country to open new revenue possibilities for all sports leagues, especially the NFL.
"Legal, regulated sports betting will create huge new revenue opportunities for sports leagues – and the NFL could be the biggest winner of all,” Slane said. “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.”
According to Slane, to reach these figures, the NFL would need to reach 100 million viewers. By allowing US residents to bet on NFL games legally, many experts think this figure is quite attainable and can be reached by 2020.
“There is obviously an increase in viewership,” Slane said. “Sports betting is a way to increase fan engagement because most fans then have skin in the game and they are more interested in watching the entirety of the game.”
The NFL was part of the court case against New Jersey’s move to legalize sports betting outside Nevada, which led to the U.S. Supreme Court overturning PASPA and allowing states to legalize sports betting.
The NFL had been opposed to sports betting but following the PASPA ruling, the league called on the U.S. Congress to “enact a core regulatory framework” for a legal sports betting on the federal level as opposed to leaving it to individual states.
A previous study done by the AGA found that 19% of football fans bet on games currently, with most wagers being placed on offshore online sportsbooks. However, once all states enact their own sports betting legislation, the number of fans who bet on football is expected to grow to 31%, an increase of 60%.
The NFL is in the process of laxing rules and changing course to generate additional revenue on fans betting on football.
A committee of NFL owners approved relaxed rules in August 2018 regarding gambling promotion, which would allow teams to partner with casinos and even allows gambling companies to now bid for stadium naming rights. This option would allow casinos and other sports betting operations to bid on naming rights for the soon-to-be Las Vegas Raiders home stadium across from the Las Vegas Strip. The Raiders could move to Las Vegas as early as 2019.
Slane stated the main point of the AGA study was to show the major sports leagues the big revenue-making opportunities are not in integrity fees or data rights, something to NBA is pushing ahead with and the NFL is avoiding for now, but instead come from making the brand more valuable by generating genuine fan interest for each respected sports league found in legal sports betting operations.
“What everyone should be taking away from this study,” Slane said. “Is that when the leagues are pushing for integrity fees and or legal requirements for purchasing of data, they really are tripping over dollars to pick up pennies when it comes to the grand scheme of the revenues that they would gain through legal sport betting.”