Projections Show NFL Could Generate Billions Annually with Sports Betting

Bags of money dropping into a hand

Sports leagues in the US have been working hard to put protective measures in place with sports betting legalization. The NFL may be surprised to hear that, according to a Nielsen report, it could make billions of dollars each year from legalized gambling.

NFL sports betting stance

A hot topic throughout the summer of 2018 has been the legalization of sports betting in the US. Since the Supreme Court decided in May to overturn the federal ban on sports betting, states have been working hard to implement sports betting.

The push to have sports betting legalized had been going on for a number of years, with New Jersey, in particular, pushing hard to end the ban.

The NBA, NHL, MLB, NFL, and NCAA came together to prevent this from happening and a lot of money was poured into lobbying efforts, which eventually turned out to be fruitless.

As soon as the Supreme Court made its decision, these leagues turned their attention to how they could protect their own interests.

While the NBA and MLB pushed for integrity fees, the other leagues took different approaches. The idea of integrity fees is that the leagues receive a cut of all sports wagers, with the funds being used to implement strict monitoring processes to preserve the integrity of their sports. No such fees have yet been implemented in any state’s sports betting legislation.

The NFL decided instead to issue its own set of guidelines. This included a provision to protect the intellectual property of the league, which would require sports betting operators to pay a license fee to get access to valuable league data.

There was also an announcement by CBS Sports, a major television partner of the NFL, that its announcers would not make any references to sports betting during their NFL broadcasts, seemingly in line with the wishes of the league. It is yet to be determined whether other major television partners, such as ESPN or FOX Sports, will follow suit.

The NFL has eased some rules concerning gambling sponsorships and advertising. Teams are now allowed to accept sponsorships from casinos, but they are not allowed to enter into a revenue-sharing agreement or promote any sportsbook products.

There has also been an easing of gambling-related ad bans, with companies being allowed to show their ads in pre- and post-game coverage.

Nielsen NFL report

While the NFL has not been outwardly hostile when it comes to sports betting, the league certainly hasn’t embraced it with open arms. The attitude could change now because of a report from Nielsen, which was commissioned by the American Gaming Association.

The report found that the sports betting market could be worth upwards of $2.3bn (£1.78bn) to the NFL each year. If this is true, it should certainly make the NFL sit up and take notice, especially its viewership figures declining.

These findings came from a survey of fans. It assumes an increase in media rights fees as a result of added interest in the NFL after sports betting legalization, as well as gains from gambling-related sponsorships, ancillary advertising, and licensing of league data.

The study estimates that, if sports betting were available across the country, media rights fee would rise by about 18%, sponsorships by over 7%, and ticket sales by over 6%.

There was no mention at all of integrity fees, an issue that has been opposed by the American Gaming Association.

NFL league data could be licensed each year for about $30m (£23.17m), with this data being vital for the sports betting operators, particularly when it comes to live betting.

There is a desire that organizations should not be forced into purchasing league data. This possibility was mentioned in a memo was sent by the NFL to its teams in July. The memo said that the league had plans to force any casino advertisers to purchase the official league data if they wanted the deal to go ahead.

The Nielsen report certainly contains interesting numbers that will appeal to the NFL and may change their stance somewhat on the subject and give them more idea as to how they can benefit from legalization.

Of course, the sports betting market is still in its infancy, since only a handful of states currently offer it.

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