At the annual owners meeting on Wednesday, NFL commissioner Roger Goodell publicly addressed a matter he can no longer ignore: legal sports betting may soon arrive across the United States — far beyond Las Vegas, Nevada, which the Raiders will call home beginning in the 2020 season. As is customary with any thorny issue, Goodell addressed it mostly vague .
“I think what we did this week was make sure people understood the, I would call it, prospects and potential for how gambling can change,” he said. “How it’s evolved on its own beyond that. And this isn’t new work. We’ve been focusing on this for several years of how does it affect the way we operate.”
Through a combination of Goodell’s remarks and from reports by national NFL writers, as well as observation of the NBA and MLB’s lobbying efforts regarding sports betting legislation over a dozen states, we can get a sense of where the league is really at with respect to wagering on its games.
The NFL, Sports Betting, Commissioner Roger Goodell And What May Be Coming Next 2r2s1m
Full-fledged sports wagering, as you surely know if you’re here, is not legal outside Nevada due to the 1992 federal law, the Professional and Amateur Sports Protection Act (New Jersey challenges PASPA’s constitutionality. A decision in that case may come as soon as Monday, April 2, or as late as June when the Supreme Court’s current term ends.
Now let’s start with a string of reports from NFL.com and NFL Network reporter Ian Rapoport, as well as notes from Albert Breer, SI’s senior NFL reporter for The MMQB.
Sources: The owners were presented with the findings of a previously secret study on gambling and the patterns of behavior associated with it. They received an update on technology and made sure the league is ready in case it is legalized.
— Ian Rapoport (@RapSheet) March 27, 2018
While the Supreme Court is close to ruling on sports gambling, the year-long study on gambling was commissioned before the case was heard. Gambling, if legal, represents not only a possible added revenue stream but also another international fan base.
— Ian Rapoport (@RapSheet) March 27, 2018
Roger Goodell said the gambling study whose findings were presented was about making sure clubs knew what the league was preparing and how preserving the integrity of the game was something that was paramount. He added the NFL has been studying it for several years
— Ian Rapoport (@RapSheet) March 28, 2018
One area addressed at this week’s annual meeting: The looming legalization of sports gambling. Owners had an informational session based on a study the league ran, much of it focused on regulation, not monetization.
— Albert Breer (@AlbertBreer) March 27, 2018
Also, ownership from the Buccaneers and Rams helped the rest of the room, with information based on their experience with legalized sports gambling in running Premier League teams in the UK.
— Albert Breer (@AlbertBreer) March 27, 2018
So, there was a year-long “secret study.” Any conscious NFL fan could have told the league what they need to know about the relationship between sports betting and eyeballs: people who bet on a game watch the game. They watch bad games. They watch for longer. They watch when they otherwise would not (Browns vs. Buccaneers on a Thursday night).
Five things: 6n4ys
(1) The “possible added revenue stream” could mean a variety of things, limited only by the league’s creativity. The first possible stream that comes to mind is the “betting right” and/or “integrity fee” for which the NBA and MLB are currently doing the bidding for every league.
In case you’ve not been tuned in, those two leagues are pushing legislation in more than a dozen states that are examining the legalization of sports betting. They’re calling for a 1% off-the-top cut of all wagers on their respective games. This could amount to a potential windfall, considering there’s currently an estimated $200 billion or so wagered illegally in the U.S. every year.
Suppose a quarter of that ($50B) moves into a regulated market in Year 2 of expanded legal, regulated wagering. That 1% would result in an annual $125M haul for the NFL where sportsbooks’ overall handle is about 25% NFL wagering. It would only grow. Not bad for having to do nothing and exist as-is.
That’s as direct as it gets and the NFL probably wants to keep some distance, but framing it as an “integrity fee” to pay for costs of monitoring wagering, or as an intellectual property right (which legally would be a giving the leagues far lesser amounts. It seems likely the league will get a slice — less than they want — in some states.
(2) MLB, the NHL and the Kraft Group (CEO and Chairman is Patriots owner Robert Kraft) have another potentially direct revenue stream via investments in DraftKings, which is making moves to become a sports-betting operator.
(3) Another potential revenue stream is ments and sponsorships with casinos that will offer sports betting, if and when law permits. The MGM Grand Detroit is already a sponsor for the Detroit Lions. If states legalize sports betting, the barrier between the league and gambling will crack or crumble.
[Also See: What International Soccer Can Teach U.S. Sports Leagues About Sports Betting Partnerships]
The NBA might dabble with small patches displaying casino or operator logos on jerseys, as teams already do with a variety of businesses: the Celtics with General Electric, StubHub for the Sixers, and Harley Davidson for the Bucks, among others. I doubt the NFL will go down this road anytime soon. we’re only four years removed from the league cancelling a fantasy football event in Las Vegas at a Sands Expo because of the proximity to sports wagering.
(4) As far as increased ratings and likely boosted fees from broadcast partners? We already know that people who’ve bet on the games (mostly illegally, for now) watch more games and for longer. Nielsen Ratings show this.
Twenty-five percent of the NFL’s total viewing audience is engaging in some form of sports betting and s for 60% of all the viewing minutes (this includes fantasy and DFS).
Also consider this article by Yahoo!’s Dan Wetzel in January, in which he writes: “Money on the game means interest in the game, especially as technology allows for in-game wagering that can keep even blowout contests intriguing.” Wetzel argues that this is precisely why the NFL commanded $3 billion from FOX for rights to its oft-maligned Thursday Night Football slate of games.
[Check out our betting page for news, stories and gaming industry content]
(5) As far as regulation? Nevada’s model has existed for decades and it works. Some states are foolishly attempting to reinvent the microwave. Blame this on the legislators and the NBA and MLB for overcomplicating matters to induce lawmakers to cede to their proposals that ultimately would bring money to the leagues instead of to the state.
The NFL and its teams will just have to be aware of regulatory frameworks in different states. For example, in one state the gaming commission may be making rules for sportsbook operators, where in another state the lottery commission may be in charge.
What Goodell Said And The Ultimate Goal 2q6d18
On Wednesday, Rapoport asked Goodell the following: What did the owners learn about the gambling study findings presented this week and if the Supreme Court ruling [results in PASPA’s repeal]? Goodell said:
“Well, I don’t have any insight into what the Supreme Court is going to do. We’re not privy to that. I think what we did this week was make sure people understood the, I would call it, prospects and potential for how gambling can change, in part because of the Supreme Court decision, how it’s evolved on its own beyond that. And this isn’t new work. We’ve been focusing on this for several years of how does it affect the way we operate.
“The number one thing which was endorsed repeatedly by our hip was the integrity of our game though. We have to make sure that whatever environment we’re working in — and some of that might be related to what the Supreme Court decides, some of it may be future legislation – we need to make sure we’re operating in an environment where we can protect that integrity of our game. We recognize that we’re dealing in an environment here where we don’t know what the Supreme Court is going to do and we don’t know how other issues are going to evolve, but we wanted to make sure our clubs fully understood what we’re doing to make sure we’re prepared for that.”
The NFL began its study before the high court took the case and now most experts and observers (including this one) believe that a favorable ruling for New Jersey resulting in PASPA’s elimination is more likely than not. It’s certainly a lot more likely now than when the study started. This partly explains the NBA and MLB’s urgent lobbying efforts.
The farthest Goodell comes to itting that gambling is good for the bottom line is “prospects and potential.”
What kind of biz opp is there for the NFL in legalized sports gambling is up for debate. Chiefs CEO Clark Hunt told me he believes it’ll be in growing the game in new frontiers like China. Another exec said he thinks it’s how Roger Goodell can get to $25 billion in revenue.
— Albert Breer (@AlbertBreer) March 27, 2018
The NFL reached $14 billion revenue in 2017. I don’t know much about the market for NFL in China (see Breer above). The NBA appears to have better prospects there. But sports betting is certainly a way to tap into a new audience, and get it to watch a game they don’t yet fully understand.
As you can see from Chiefs’ chairman and CEO Clark Hunt and an unnamed executive’s remarks, there’s concern with the “integrity of the game” with expanded sports betting. But it’s not a real concern.
The NBA has made the case that regulation and the elimination of a black market will make sports betting more transparent and enhance the “integrity of the game.” It will increase leagues’ and sports betting operators’ collective ability to identify and squash any potential attempts at bribes or fixes.
Reported Andrew Beaton of the The Wall Street Journal in a recent interview with Goodell:
Goodell declined to discuss specifically what the league would do if sports betting is legalized. One owner, speaking anonymously, suggested the league will have to seek some sort of deal: “Why would we let other people have all the benefit of something we’re creating?” And despite its public stance, the league has shown signs of a change in position. The Oakland Raiders, after all, are readying to move to Las Vegas.
Right now, the NBA and MLB are seeking a deal that would benefit the NFL, arguing in the intellectual property this unnamed owner echoes. If the Supreme Court rules against the leagues, the NFL may quickly forces as state-level efforts to legalize sports betting continue to advance.
Can revenue really surge to $25 billion at a time when injuries, namely head injuries, are forcing dramatic NFL rule changes, threatening the pipeline of talent, and Americans’ comfort in general with watching such a violent sport?
Embracing sports betting is the surest and fastest pathway.
Also Check Out From SportsHandle: 461d4l
The Marriage of Sports Betting, Analytics And Notice Bettors
In A Regulated U.S. Sports Betting Market, Which Operator Will Be King?
Q&A: Here’s How a Local Bookie Really Operates: Myths and Reality
DraftKings Officially Preparing Sports Betting Vertical, Hires Sportsbook Director
