NFL, NBA, NHL and MLB could gain windfall of up to £3.2 billion from legalised sports betting

The casino industry survey could intensify the debate between the gambling industry and US sports leagues over revenue sharing

Thursday 18 October 2018 14:02 BST
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The four major U.S. professional sports leagues could reap a combined $4.2 billion (£3.2bn) annually as a result of legal sports betting, most of it indirectly from increased fan engagement, according to a casino industry survey to be released later on Thursday.

The National Football League (NFL) stands to make the most, with a projected $2.33bn (£1.78bn) of additional annual revenue, according to the study seen by Reuters. Major League Baseball (MLB), the National Basketball Association (NBA) and the National Hockey League (NHL) would account for the rest.

The Nielsen Sports survey was commissioned by the American Gaming Association (AGA), which represents the casino industry.

The findings could add fuel to a long-simmering feud between the gambling industry and American sports leagues over whether to share revenues.

For years, the leagues fought states' efforts to legalise sports betting, arguing that it would lead to game fixing and ruin integrity.

The NFL could make as much as £1.78bn in additional revenue
The NFL could make as much as £1.78bn in additional revenue (Reuters)

But in May, the U.S. Supreme Court threw out a federal ban against sports betting, paving the way for any state to legalise, regulate and tax the activity.

Since then, the leagues have sought to glean a portion of the coming windfall. Leagues say legalisation means they need to fund additional integrity measures, and that they deserve a portion of wagers because there would be nothing to bet on without their players, their stadiums and the games they put on.

MLB, for instance, has said it wants one percent of the total amount of money bet, as a so-called “integrity fee”. Lawmakers in New Jersey, the first major state outside of Nevada to roll out sports betting, flatly rejected that idea.

At last week's annual Global Gaming Expo in Las Vegas, tensions flared when Kenny Gersh, an MLB executive vice-president, said during a panel event that the integrity fee should be called a “royalty” and that leagues had lowered their ask to just 0.25 percent.

“You want a cut of the revenue without any of the risk,” shot back fellow panellist Sara Slane, the AGA's senior vice president of public affairs.

US sports leagues want a percentage of money bet to fund integrity measures
US sports leagues want a percentage of money bet to fund integrity measures (Getty)

“We have to go through a regulatory process. We invest billions of dollars in buildings and our licenses,” she said. “You want us to take that risk, pay you, and then you're going to benefit on the back end as well.”

The AGA study found that $596m (£455m) of leagues' total increased annual revenues would come from gaming services spending on television advertising, $267m (£204m) from sponsorship deals with the sports betting industry and $89m (£68m) from data and video revenue.

But the rest would come if more fans – attracted by the appeal of being able to lay bets – watch games and are drawn into stadiums. The biggest portion of the total increase – nearly $3.3bn (£2.5bn) – would come from those indirect revenues, including media rights and more merchandise and ticket sales.

For the NFL alone, indirect revenues could grow 13.4 percent to $14.8bn (£11.3bn) of annual revenue, the report said.

The study has a margin of error of three percentage points and surveyed more than 1,000 adult sports fans and those who were self-identified bettors, asking how a national legal market would affect sports consumption habits.

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