With the National Hockey League recently partnering with MGM Resorts as its official gaming partner and starting to embrace sports betting, there are a lot of benefits to be derived for many different parties.
For many years, the NHL had rallied against the introduction of sports betting in the US. It joined forces with the other major sports leagues in the country, but their attempts to block legalization ultimately failed.
Since the Supreme Court overturned the federal ban on sports betting in May 2018, the NHL has started to embrace the sector. As the old saying goes – if you can’t beat them, join them.
NHL plans for sports betting
In early November, the NHL announced a new partnership with MGM Resorts, in the capacity of “official sports wagering partner”. It also announced that FanDuel would be the “official sports betting partner of the league”.
FanDuel was previously a major player alongside Draft Kings in the fantasy sports space. When sports betting was legalized, it wasted no time in getting involved.
European sports betting giant Paddy Power acquired a majority stake in FanDuel’s business. It now operates sportsbooks in a number of states, most notably in New Jersey, where it also has its own mobile sports betting app.
One of the league’s teams, the New Jersey Devils, had previously accepted a sponsorship deal – also with FanDuel – as well as having two sponsorship portions of its Prudential Centre filled with Caesars and William Hill branding.
Other teams are now looking into how they can benefit from legalized sports betting for themselves. The Las Vegas Golden Knights, for example, are sponsored by William Hill.
Savings for the fans?
The president of the Los Angeles Kings, Luc Robitaille, recently spoke on an ESPN podcast about the potentially significant sums of revenue that will come into the NHL if sports betting proves to be popular.
He said: “If teams profit, then everybody will profit. If you go by the numbers on the illegal part, it’s pretty significant. If that part ends up on the team side, I think it’s going help everyone. First of all, the [salary] cap will go up. Fans will be happy. Teams will spend more money on players. Players’ salaries will go up.”
He believes that the potential revenues could be so much that the savings will even reach the fans. While selling tickets is an important part of the hockey business, the prices can often be hefty.
This has led to declining numbers for numerous teams in the league, but if they start making significant revenues from sports betting deals, they could then cut ticket prices to make them more affordable.
This would not only deepen the loyalty of their fan base, but also fill more seats throughout the entire season.
According to a study by Nielsen Sports, the NHL stands to gain around $216m annually thanks to legalized sports betting. Of this amount, about $65m would by through gambling-related advertising on NHL events.
Other major sports leagues’ plans
The other major sports leagues have also been looking at how they can benefit from sports betting.
The MLB, NBA and PGA Tour have been pushing for so-called integrity fees. This would be a slice of revenue from every bet placed on a game under their brand. They have been lobbying hard in a number of states, but no integrity fee has yet been included in the final version of a sports betting bill.
A few states are actively considering it. While the leagues want to ensure the integrity of their sports by having effective monitoring systems in place, they also want to be paid for the use of their official league data, something that gambling operators currently use for free.
It is likely that if integrity fees are not a flier in 2019 then the leagues will focus more on pushing for issuing licenses to use their official data.
The NBA has also partnered with MGM Resorts as its official gaming partner, just like the NHL.
The NFL has allowed casinos to sponsor teams, but it is not allowed to promote sports betting offerings to the fans in a direct manner. The two teams in the league that have so far signed deals with casinos are the Baltimore Ravens and the Dallas Cowboys.
It is an interesting time for all of those involved in major sports in the US as sports betting continues to spread across the country. Plenty of new opportunities to make significant revenues are becoming available to both the teams and the leagues.