Major League Baseball (MLB) stands to benefit from legal sports betting through a significant increase in fan engagement as well as advertising and sponsorship deals.
With so many sports vying for the attention of viewers and fans, this is an area that MLB will want to focus on. They want fans to be even more invested than usual, which will lead to more people going to games and more attention for the sport.
The MLB has already flung itself headfirst into sports betting with recent deals, so the organization clearly knows how it stands to benefit.
Initial sports betting resistance
In recent years, MLB joined the NFL, NHL, NBA, and NCAA in staunchly opposing the legalization of sports betting. They fought tooth and nail in the courts to defeat attempts to end the federal ban.
In May 2018, they finally lost this battle when the Supreme Court brought an end to the ban. Now that several states have already legalized sports betting and many other states are ready to follow, the major sports league are looking to make the most of the situation.
Estimates show that as many as 40 states could have legal sports betting withing two years of the ending of the federal ban. This leads to a lot of opportunities for stakeholders in the major sports world.
MLB and the NBA aggressively pursued integrity fees when it became obvious that sports betting was on its way.
An integrity fee would be a slice of revenue from every bet on a game played under the auspices of one of the sports leagues. However, no state has yet included an integrity fee in a legalization bill despite massive lobbying efforts.
The main reason is that it would act as a significant disincentive for operators, who are already paying taxes on a state and federal level.
Another chunk out of their margins would stifle the sector. Therefore, the leagues have largely thrown out this idea. Instead, they are looking at ways in which they can package official league data and sell it to sportsbooks.
Latest MLB moves
MLB entered into a partnership with MGM Resorts in November after MGM had already gone into partnerships with the NBA and NHL.
Under the deal, MGM Resorts is the official gaming partner of the MLB and will be able to use the MLB logo as part of its advertising, while also getting access to exclusive league data. In return, MGM will help the league with its integrity monitoring system.
The NBA is partnering with two well-known sports data companies, Sportradar and Genius Sports, under which the league will sell the sportsbooks access to important live league data. Live betting is becoming more and more popular thanks to mobile betting.
Therefore, operators want to have access to the best live data available, something that leagues like the NBA can provide. MLB will no doubt do something similar in the future after largely abandoning the idea of integrity fees.
Individual MLB teams
It is not just the league as a whole that stands to benefit from legalization; individual teams will also find ways to make it a lucrative move. They will engage with sportsbooks for sponsorship and other activities.
One of those teams is the 2018 World Series champion, the Boston Red Sox. They are not so much interested in the extra revenue as in increasing levels of fan engagement.
The idea that, if a game is a runaway for one team, people will turn off and watch something else. However, if you have a bet on the line for a certain pitcher or hitter to reach a certain mark, you will keep watching.
This is how legal sports betting can boost engagement. Of course, illegal sports betting has long been popular in the US, so it is not yet known to what extent this effect might be observed.
This is why regulation and cracking down on the illegal side of things is so important. The authorities want those betting on sports illegally to be brought over to the legal side, where their wagers can be put to good use.
Sam Kennedy, the chief executive officer and president of the Boston Red Sox, has explained his views on legal sports betting and the effect it may have on his team.
He says: “Yes, there will be a positive revenue impact for the team – how much I don’t know – but that is absolutely secondary in my opinion to the (increased) engagement, to people following, paying attention, being engaged with the Boston Red Sox, Patriots, Bruins, and Celtics as a result of betting on that sport and betting on in-game activities.”