Let battle commence: American sports are set for a lucrative betting sponsorship land grab

 
Carsten Thode
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Oklahoma City Thunder v Dallas Mavericks - Game Three
Dallas Mavericks owner Mark Cuban (l) has been a vocal proponent of legalised sports betting in the US (Source: Getty)

That sound you heard on Monday was the popping of champagne corks as the US Supreme Court ruled to strike down the law that made sports betting illegal in the US outside the state of Nevada.

Technically, the ruling doesn’t legalise sports betting in itself but it does allow each state to legalise it if they so wish.

Not surprisingly, most states so wish.

New Jersey brought the case to the Supreme Court in the first place so you will be able to place a bet there within a couple of weeks. Four other states passed pre-emptive legislation legalising sports betting in anticipation of this ruling, while a further 14 have already introduced bills to their legislature. Within a year or two, this will be a tidal wave that will cover the whole country — with the probable exception of Utah and Hawaii.

However, those champagne bottles weren’t being opened to celebrate any sense of justice being done. This was all about the money. Frankly, other than the illegal, underground bookmakers who are currently feeding the (significant) gambling habit of Americans, it is hard to think of anyone who won’t benefit from an enormous commercial windfall.

Read more: UK bookies are up after a US court ruling slapped down PASPA

First and foremost, the individual states are now able to collect tax on the profits of an industry that some people estimate to be worth at least $400bn (£296.4bn) per year.

Bookmakers are the next obvious beneficiaries with over £1.5bn added to the market values of British betting firms immediately after the ruling was made public. Shares in Paddy Power Betfair soared by over 12 per cent. Meanwhile companies like DraftKings and Fan Duel who are currently navigating a loophole in the legislation with their daily fantasy propositions, already have an active database of 10m people who like to stake money on sports predictions.

The major sports leagues and their teams are chilling their champagne flutes as well. Ironically, they were fighting against the ruling, arguing instead for a Federal solution rather than a state-by-state one. But that technicality notwithstanding, Mark Cuban, the outspoken owner of the Dallas Mavericks NBA team has gone on record saying that this ruling will double the franchise value of all teams in the major US sports leagues.

Even if the — frankly preposterous — one per cent “integrity fee” that the leagues are proposing doesn’t come to pass, there are multiple ways that the leagues and teams will benefit commercially. People are significantly more likely to watch more minutes of more games when they have money on it, so that increased viewership will be reflected in the rights fees. Sports data will become the oil in the engine of the industry so expect to see significantly more deals like US Soccer’s $1.5bn deal with STATSports and Sportradar’s exclusive deal with the NFL.

Even more significantly, the ruling has also opened up a gigantic new sponsorship category. Gambling companies now account for a staggering 45 per cent of Premier League shirt sponsorships and completely dominate the commercial breaks as they compete to be front of mind in the “moment of truth” when the bet is placed. That is worth a lot of money to betting companies and they have shown a willingness to pay for it. Let the land grab commence.

Read more: How gambling and betting companies have taken over the Premier League's shirts

But the biggest winner of all will be those responsible gamblers around the country, who no longer have to go underground to unregulated, dark markets. They will now have access to transparent odds, payouts on their winning bets will be guaranteed and there will be a route to legal recourse if necessary. Contrary to some who argue that an explosion of betting might lead to more corruption, almost all evidence suggests that this increased transparency will decrease the opportunity to manipulate the markets as irregular betting patterns become easier to identify.

Of course, there is a long way to go and there are likely to be plenty of bumps in the road before this all plays out. But the genie is out of the bottle and sports marketing in the US will never be the same again.

That’s something you can bet your mortgage on.

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