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Saturday, February 2, 2019
More Wagering Equals More Benefits for '2nd Tier' Sports (published at Money Inc.)
I wrote this article for ADC Partners, Inc. It was originally published at MoneyInc.com.
An historic moment in American sports wagering happened last May. It didn't happen on a field, in a rink, a ring, a court, or a gym. No balls were thrown, no shots taken, no races run, no records set nor bets placed. The players wore uniforms and they were on the same team.
When the gown-clad Justices of United States Supreme Court determined as unconstitutional the federal ban on sports betting established by the Professional and Amateur Sports Protection Act of 1992 (PASPA), they made sports history: They opened the gates to the sports gambling kingdom.
With legalized sports wagering a reality, experts agree there's plenty of money to be made. By 2023, 32 states could offer regulated sports betting, generating a market worth more than $6 billion in annual revenue (Eilers & Krejcik Gaming).
As Big League organizations tread tentatively into this uncharted territory, they'll follow the pioneering trail blazed by Brett Lashbrook, whose USL soccer squad was the first pro sports team to fully embrace sports wagering. Attend a Las Vegas Lights game and you're likely to listen to an MC encouraging attendees to use their mobile devices to bet on almost anything game related.
Owner and President of the Lights, Lashbrook is bullish on sports wagering's potential to open new revenue streams for lesser leagues.
"We tapped into Vegas' existing sports wagering infrastructure to establish and promote mobile gaming in our stadium," said Lashbrook, whose Lights last year signed a deal with William Hill, a bookmaker based in London, England. He explains that lesser leagues and teams have more flexibility in terms of creating partnerships and experimenting with sports gambling.
While the impact of legalized sports wagering to expand profits for major pro sports leagues is well established and exhaustively discussed, Lashbrook's activities indicate that widespread betting offers '2nd Tier' leagues like the USL and others opportunities to generate new revenue streams and increase team exposure.
According to the UNLV Center for Gaming Research, in 2017, betting in Nevada on football, basketball and baseball each achieved record highs. Of the overall betting pie, football, basketball and baseball took about 91% combined (36%, 31% and 24%, respectively). The 'other sports' category–hockey, soccer and others–comprised a record 9% of 2017 betting.
Increased betting on 'other sports' slightly eroded betting on football, basketball and baseball. The end of PASPA will accelerate that trend, making regulated sports gambling widely accessible and spurring unprecedented growth. Because regulated gambling opportunities will expand alongside the growth of regulated gambling venues, gaming experts believe betting on other sports will also increase.
Count Lashbrook among those experts: "There absolutely will be a trickle-down effect. Being at the forefront of this trend has generated sponsorship dollars we hadn't anticipated months ago. This is a huge market for all sports,” Lashbrook continues. "The concept is the same, only the scale is much bigger."
Lashbrook contends that legalized sports wagering offers lesser leagues and teams three sources to generate revenue:
Traditional sponsorships: Teams can sign exclusive sponsorships with a betting company so only that company will be promoted to its fans in the stadium. At the Lights stadium, William Hill is the only gambling signage, and the team promotes only their lines. Lashbrook explains: "This doesn’t mean MGM/Caesars/Stations sports books can’t take bets on our games. We just don’t promote it." With mobile gaming, he adds, "companies can reach exponentially more sports fans in a venue like ours, where we offer both mobile gaming and the unique advertising opportunities that come with it."
Sign up incentives: Because the gaming industry seeks the attention of sports fans 24-7-365, there’s a battle brewing among booking agencies to get users to sign up for “their” app. As casinos compete to convince fans to choose their app over the others, lesser pro sports leagues have more leverage to negotiate 'exclusive' deals.
Partnerships with rapidly expanding sports wagering information networks. Organizations like the Vegas Sports Insider Network (VSIN) offer wagering advice but don’t accept bets. As Lashbrook explains, "it’s like investment advisory services but for gambling." Think Wall Street Journal meets sports wagering.
Lashbrook says more sports wagering will generate more revenue simply because betting is fun: "Gambling makes the game more fun, and we want our fans to have as much fun as possible." Lashbrook’s Lights are in the business of monetizing fun, and business is booming.