Billions in Revenue Projected for Sports Leagues From Legal Sports Betting
Published October 29, 2018 by Elana K
A study commissioned by the AGA projects that the annual revenue of major national sports leagues could increase by over $4 billion dollars per year now that the Supreme Court has repealed PASPA and rendered sports betting legal in the U.S.
A new study projects that the annual revenue of major national sports leagues could increase by over $4 billion dollars per year now that the Supreme Court has repealed PASPA and rendered sports betting legal in the U.S.
Specifically, annual revenue for Major League Baseball (MLB) could increase by over $1 billion; revenue for the National Basketball Association (NBA) could increase by nearly $600 million; revenue for the National Football League (NFL) could increase by $2.3 billion; and revenue for the National Hockey League (NHL) could increase by $216 million.
The study was commissioned by the American Gaming Association (AGA) and performed by Nielson Sports.
Where’s All That Money Coming From?
The study's projections don't rest on the income from sports betting alone; rather, they include different streams of revenue like advertising, sponsorship, data, product revenue, media rights, merchandise, and ticket sales. In other words, not only will sports betting itself bring in more revenue than previously, but it will also generate greater fan engagement. In fact, the majority of revenue will come from increased fan engagement.
The Purpose of the Study
The gaming industry and sports leagues have been at loggerheads for years regarding sports betting; the difference between now and five years ago is that sports betting is currently legal.
Sports betting proponents spent years trying to get the Supreme Court to repeal PASPA, while the national sports leagues fought them every step of the way. The leagues' claim was that legalizing sports betting would compromise the integrity of the games. The Supreme Court, however, did not side with them in May 2018, and indeed repealed PASPA.
Since sports betting has been legalized and the potential windfall realized, the sports leagues have been trying to figure out a way to get a piece of the incoming wagers. They claim that they should get a percentage in order to fund extra security measures, and also because without the leagues, there would be nothing to bet on.
The AGA-commissioned study, however, shows that America’s national sports leagues have a lot to gain from legalized sports betting, even without taking a cut of the bets. Whether this was the formal goal of the study or an extra perk is unclear; also unclear is whether it will have any effect on the sports leagues attempted encroachment on the gaming industry's revenue.
