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Tuesday's 2-Minute Tip

September 27, 2022
Ceasar's sportbook outside of Diamondbacks arena
Photo by Julianne Culey

Sports betting: Partnerships abound

Since the Supreme Court decided in 2018 that states could decide for themselves whether to legalize sports betting, 36 states, plus Washington D.C., have done so. Ironically, before the decision, many major sports leagues and players in the U.S. opposed legalized betting. As former Knicks guard Bill Bradley put it: “Having been an athlete, I don’t like being considered a roulette chip.” But in the last few years, the NBA, NFL, NHL, and MLB have all made a sharp pivot by entering into partnerships with sportsbook operators and actively displaying betting ads during games.

There is so much going on in the sports betting industry, that this tip will be split into two parts. This week we’ll go over the partnerships between sportsbooks and various entities, and next week we’ll explain the impact of advertising spending and tax revenue.

Major leagues and teams

Essentially all major leagues in the U.S. have developed some sort of partnership with one or more sportsbooks. In addition to the four big leagues, deals have been developed with the WNBA, Nascar, MLS, PGA, LPGA, UFC, WTA, the National Lacrosse League, and even Major League Fishing (yes, that last one is real).

In some states, sports teams are able to have their own sports betting licenses if they partner with an appropriate sportsbook. Most of these deals include retail sportsbooks inside or near the teams’ stadium or naming rights. One of the latest teams to strike a deal is the Memphis Grizzlies basketball team which announced last month a partnership with Caesars Sportsbook that includes a rebranded stadium lounge at FedExForum.

College sports

The University of Colorado was the first university to announce a partnership in 2020 after sports betting became legal in Colorado. Since then, only a handful of universities have agreed to partnership deals, but experts are expecting many other universities to follow suit in the near future.

Considering how long the NCAA attempted (and continues) to prevent legalized betting on college sports, this unique partnership is one journalists should keep a close eye on. Each state has developed different rules around college sports betting, including Oregon which does not allow it. Some states do not allow online betting for college games, while others do not allow betting on in-state teams. Some exceptions have been carved out for tournaments as well as tribal casinos.

Media organizations

Some experts have noted that the partnerships between media organizations and sportsbooks are a natural fit. The Associated Press was one of the first mainstream media companies to do so when they announced a partnership with FanDuel. Turner Sports struck a deal with DraftKings and FanDuel to integrate betting information into their programming to drive more viewership that has dwindled over the past few years.

Partnerships like these are likely to push the industry towards more real-time betting and micro-betting. Turner Sports believes that if viewers are betting in real-time on the game, they are more likely to watch for longer periods of time, increasing overall ratings. But higher ratings aren’t the only way these partnerships will boost revenue: media companies can also earn referral fees for each new customer they bring to the sportsbooks.

Celebrity endorsements

Most of the celebrities who have partnered with sportsbooks are current or former athletes such as Robert Mathis, Drew Brees, and Jordan Spieth. But actors like Aaron Paul, Jamie Foxx, Ben Affleck, and Halle Berry have also used their celebrity to develop lucrative deals with sportsbooks.

Some of these partnerships are more than mere endorsements. For example, Nicki Minaj has collaborated with MaximBet as an investor and advisor to work on ‘merchandise, parties, partnerships, fan experiences and branding all designed to bring together entertainment, sports, celebrity and betting.’

What do you think will be the next entity to join forces with sportsbooks? Check out this partnership tracker to stay up to date.

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