Tuesday, October 12, 2021

Media Companies Greeting Legalized Gambling

Legal sports betting is now available in more than two dozen states and the District of Columbia, though some allow only in-person wagers rather than online play. Over half the adult population in the United States is in a state where some form of sports betting is legal. By 2023, that could grow to more than 80% of adults in the U.S., according to The L-A Times.

Global digital betting revenue is estimated to exceed $43 billion in 2025, up from $25.5 billion this year, according to research firm H2 Gambling Capital.

“What was perhaps considered a little bit of a taboo subject historically is now being largely or completely accepted as part of the sports media landscape,” said Freddie Longe, executive vice president and managing director of Endeavor Group-owned betting business IMG Arena.

Endeavor, the owner of agency WME and the Ultimate Fighting Championship, last month announced its acquisition of sports betting platform OpenBet for $1.2 billion in cash and stock.

Sports leagues that once opposed gambling as a threat to the integrity of games have increasingly come to accept the practice.

The NFL, which long distanced itself from wagering, now has sportsbooks such as DraftKings, FanDuel and Caesars as official sponsors, a first for the league. The designation entitles the companies to use the league’s shield logo in its advertising, in a deal reportedly worth $1 billion.

And sports media companies — including ESPN, Fox Sports, CBS Sports and Turner Sports — are seeking a piece of the action.

Lee Berke, president of the consulting firm LHB Sports, Media & Entertainment, said sportsbook companies are putting 80% of their revenue into marketing. Sports betting has exploded as an advertising category for NFL TV rights-holders Fox, NBC, CBS and ESPN.

Only two years ago, Disney’s then-CEO Bob Iger distanced the company from wagering, saying, “I don’t see the Walt Disney Co., certainly in the near-term, getting involved in the business of gambling, and in fact, facilitating gambling in any way,” though he noted that ESPN would include gambling-related information in its coverage.

Although ESPN, according to executives, has no plans to become a sportsbook and facilitating bets itself, it sees gambling-related coverage as an opportunity to better engage young audiences.

Media companies have greeted the arrival of legalized gambling as a chance to improve ratings as cord cutting accelerates.

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